Research Article

BRITISH PETROLEUM VS. THE NIGERIAN GOVERNMENT: THE CAPITAL GAINS TAX DISPUTE, 1972–9*

CHIBUIKE UCHE^a1

^a1 University of Nigeria, Enugu Campus

ABSTRACT

This article documents a landmark dispute between British Petroleum (BP) and the Nigerian tax authorities that occurred over a N130 million (£100 million) capital gains tax assessment arising from an intra BP Group transfer of its 50 per cent shareholding in Shell/BP Nigeria. This was necessitated by a BP transaction in Abu Dhabi. This tax assessment, which was more than twice the yearly cash flow of BP's Nigerian operations at the time, ignited a chain of events and schemes that saw the British government covertly and overtly providing support to BP, with the primary goal of influencing the outcome of the dispute in order to protect the interests of both the British government and BP. Evidence in this article highlights the complexities of postcolonial relationships between centre countries and African ex-colonies.

Key Words:

• Nigeria;
• business;
• economic;
• oil;
• postcolonial

Footnotes

* The research for this article was undertaken while the author was an Alexander von Humboldt Georg Forster Fellow at the Humboldt University, Berlin (Nov. 2008–Sept. 2009). I thank the Humboldt Foundation and the Humboldt University for generously funding this study. I am also grateful to the staff of the British National Archives in London and the British Petroleum Archives in Warwick for assistance in gathering the relevant materials for this article. Earlier versions of this article were presented at the Africa Colloquium of the Centre for Asian and African Studies, Humboldt University, Berlin; the School of Accounting and Commercial Law, Victoria University of Wellington Seminar Series; and the Department of Accounting and Finance, University of Auckland Seminar Series. I am grateful to participants for their constructive criticisms. Gareth Austin and two anonymous reviewers for the Journal of African History also read earlier drafts of the article and provided useful guidance. The usual disclaimer applies.