Galp Escalates a €150 Million Mozambique Tax Dispute to World Bank Arbitration

Galp has taken its tax fight with Mozambique out of the country's own courts and into an international arbitration tribunal, escalating a dispute over more than €150 million that stems from one of the largest African energy deals of the past year.

From a Rovuma gas stake to a World Bank tribunal

The Portuguese energy group confirmed it has filed for arbitration at ICSID (International Centre for Settlement of Investment Disputes), the World Bank body that hears disputes between foreign investors and states. According to the centre's registry, the case — brought by Galp Energia SGPS together with two subsidiaries, Galp Energia Portugal Holdings B.V. and Galp East Africa B.V., against the Republic of Mozambique — was registered on 26 June under reference ARB/26/31.

The quarrel goes back to a deal completed in March 2025, when Galp sold its 10% stake in Area 4 of the Bacia do Rovuma (Rovuma Basin), a vast offshore natural-gas concession in northern Mozambique, to ADNOC (Abu Dhabi National Oil Company), the state oil company of the United Arab Emirates. The Rovuma finds rank among the biggest gas discoveries made in Africa this century, and the sale marked Galp's exit from a project it had held for well over a decade.

A €920 million gap in the maths

At the heart of the row is how much of that sale should be taxed. Mozambique's Autoridade Tributária (Tax Authority) put the taxable capital gain at roughly €920 million and issued an assessment demanding around $175.9 million — about €151.6 million — in tax, with enforcement proceedings already under way.

Galp's own reading of the numbers is dramatically different. The company contests the assessment, arguing the taxable gain amounts to just €26 million — some 35 times smaller than the figure the Mozambican tax office arrived at. That chasm, rather than the principle of paying tax, is what the two sides cannot bridge, and it is why Galp has reached for the investor-state arbitration route that many cross-border energy contracts hold in reserve for exactly this kind of impasse.

What is at stake

Mozambique's government has framed its position as defending the national interest and ensuring foreign investors pay what is owed on gains extracted from the country's resources. For Galp, the arbitration is a bid to cap a liability that could otherwise swell well beyond the headline assessment once penalties and interest are added.

ICSID cases are slow, often running for years before an award lands, and the outcome will not reshape Galp's day-to-day business — the group long ago pivoted its growth toward Namibian exploration and its Sines refinery and biofuels plans. But the dispute is a reminder that the tax treatment of the giant asset sales now reshaping global energy portfolios can leave a long and expensive tail, and that even a clean exit from a project can pull a company back to the negotiating table years later.