Tullow Oil loses $196.5 million Ghana tax dispute; shares tank

Sept 30 (Reuters) - Tullow Oil TLW.L lost a $196.5 million tax dispute with Ghana on Wednesday after an International Chamber of Commerce tribunal rejected the London-listed producer's claim that the assessment breached its petroleum agreements.

Shares of the West Africa-focused Tullow tanked 34.3% to 12.82 pence by 0744 GMT, a reaction Panmure Liberum analyst Ashley Kelty called overdone.

"The loss of the tax case is not a huge surprise...but the problem is that until they make some decent progress on paying down debt, I can't see long-term survival really for the company," Kelty said.

Tullow has spent the past year reshaping itself around Ghana by selling assets in Gabon and Kenya and refinancing in order to trim down its over a billion-dollar debt load.

The tribunal found that Ghana's corporate income tax assessment on insurance proceeds received by Tullow between 2016 and 2019 did not violate the agreements and that penalties equal to 100% of the assessment were not covered by their contractual protections.

"Tullow is disappointed that the Tribunal has come to this decision and will now consider next steps after further engagement with the Government of Ghana," the company said in a statement.