being given by the company for non-payment of dividends in the last three years.
The company’s investor forum held in Accra on Wednesday nearly turned chaotic as one shareholder after another sought to find out how and why the company was still not paying them their dividends.
While some of them boldly questioned the company’s dividend policy and called for a review of the policy, others rubbished its Corporate Social Responsibility (CSR) initiatives, suggesting that funds being channeled into those programmes be used to settle the dividends.
“Is it possible for Tullow Oil to cut down on its CSR activities so that shareholders can also benefit because all the questions being asked center on dividend payment; no matter how small it is shareholders can be proud that this year Tullow paid some dividends?” one shareholder submitted.
Rationalising the situation further, another shareholder sought to find out whether the lead operator in Ghana’s oil sector had discharged its tax obligations to government and made any salary increments for its staff.
Tullow Oil plc announced in 2014 it will not pay dividends to shareholders following some financial constraints it was facing.
This is not the first time Ghanaian shareholders have spent more than half the time at the forum demanding to know from the operators why they had failed to honour their dividend payment obligations.
Last year’s forum saw a similar development albeit more controlled.
Tullow Oil plc has since 2014 not paid dividends to shareholders following what the company described as financial constraints it was facing.
Another shareholder also said the company cannot continue withholding their benefits with the explanation that oil prices in the world market have dipped.
According to Tullow, its profits declined by eight percent between 2015 and 2016, representing a drop from $591 million to $546 million within one year.
This led to an after tax loss of about $600 million at the end of 2016.
Although the company admitted raking in profit in its operations in Ghana, it had withheld the payment of dividend to shareholders.
Addressing the concerns of the shareholders, Tullow Group CEO, Paul McDade, said it was the decision by the company’s Board to suspend payment of the dividend.
He said when the oil prices dipped in 2014, the company was already working on the $4 billion Tweneboa, Enyeba, Ntomme (TEN) field offshore so it could not stop its investment.
Tullow regretted the confusion over the non-payment of dividends at the forum, describing it as “some misunderstanding of the work we do; we do other things beyond paying dividends and it appears we have to communicate appropriately with our shareholders so they understand the business we are in.”