Mozambique: Galp believes no grounds exist for €151.5M tax bill

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Mozambique: Galp believes no grounds exist for €151.5M tax bill

10:36 CAT | 28 Oct 2025

File photo: Lusa

Galp said on Monday that there is no legal basis for the Mozambican tax authorities to claim €151.5 million from the sale of its stake in a gas project and that it is “very committed” to finding a solution with the government.

“We believe that there is no legal basis for this complaint, […] we are very, very committed to finding a solution with the Mozambican government,” said Galp’s co-chief executive João Diogo Silva, in a conference call with analysts about the third quarter results.

Lusa reported on 8 October that the Mozambican Tax Authority (AT) is claiming $175.9 million (€151.5 million) from Galp in connection with the sale of the oil company’s stake in a gas project, warning that the amount “could rise” and that an enforcement process is underway.

When asked about this dispute, the co-executive chairmen, Maria João Carioca and João Diogo Silva, emphasised that Galp respects its institutional obligations and is following the due course of the law.

“Galp has been in Mozambique for more than 65 years; we are very, very, very present in the downstream business [final stages of the production chain up to the sale at petrol stations]. It’s a country that we totally respect,” said João Diogo Silva.

For her part, Maria João Carioca said that the oil company does not foresee any additional cash flow risks in the last quarter of the year as a result of this dispute, and that “it sees conditions to continue its presence in Mozambique”.

At issue is the tax dispute that followed the conclusion last March of the sale of Galp’s 10% stake to the United Arab Emirates state oil company (ADNOC) in Area 4 of the Rovuma Basin, in the north of the country, for natural gas production, in a deal worth around $950 million (€819 million).

Galp had previously announced that it had formally taken the first step towards resolving the dispute with the Mozambican tax authorities by filing a case in an international arbitration court.

On Thursday, the Mozambican government stated that there are no negotiations with Galp on the case concerning the amount of capital gains tax. However, it believes in the “good sense” of the Portuguese oil company.

“We believe in the good sense of the companies involved in honouring their tax obligations,” said Mozambique’s Secretary of State for the Treasury and Budget, Amílcar Tivane, when questioned by journalists in Maputo about the dispute, asking for “patience” and admitting that “in the near future” the AT will inform about the outcome of the process.

Galp recorded a profit of €973 million in the first nine months of the year, 9% more than in the same period in 2024, with a “record” of €407 million in the third quarter (+53%).

Source: Lusa