ACCRA — Tullow Oil lost a $196.5 million tax dispute with Ghana on Wednesday after an arbitration tribunal ruled against the oil producer.
The tribunal rejected Tullow's argument that the corporate income tax assessment breached its existing petroleum agreements with the West African nation.
The ruling triggered a sharp decline in Tullow Oil's stock. Shares fell 34.3 percent to 12.82 pence by 0744 GMT on Sept. 30.
The tax dispute centered on fields in Ghana that generate the majority of Tullow's oil production. Panmure Liberum analyst Ashley said the market was reacting sharply to the arbitration setback and the unexpected financial liability.
The ruling could set a precedent for future tax disputes between energy companies and host governments across Africa. Such cases are closely watched by other operators in the region.
