Tullow Oil has lost an arbitration dispute with Ghana over a $196.5 million corporate income tax assessment linked to insurance proceeds received after disruptions to its oil operations, in a ruling that could expose the company to a total tax assessment of about $393.1 million including penalties.

The International Chamber of Commerce (ICC) tribunal ruled that Ghana’s tax assessment did not breach Tullow’s petroleum agreements and rejected the company’s claims against the assessment, according to Tullow and the Ghana Revenue Authority (GRA).

The dispute concerns business interruption insurance proceeds received by Tullow during the 2016-2019 financial years. The GRA had initially assessed $196.5 million in corporate income tax on the proceeds.

The Ghanaian tax authority said the final assessment, including penalties, amounted to $393,091,993.70. It said the tribunal also found that the assessment was not time-barred and that the GRA’s enforcement action was lawful.

The tax case arose from insurance payments linked to losses suffered by Tullow following disruptions involving the FPSO Kwame Nkrumah, which is used in Ghana’s Jubilee oil field.

Ghanaian authorities argued that the insurance proceeds constituted taxable income. Tullow challenged the assessment, arguing that the taxation was inconsistent with its petroleum agreements.

The tribunal rejected that argument, finding that the assessment did not violate the agreements, Tullow said in its statement on Sept. 30.

The tribunal also considered the 100% penalties imposed by the GRA. Tullow said the tribunal ruled that the penalties fell outside the contractual protections contained in its petroleum agreements.

Tullow said it was disappointed by the decision and would consider its next steps following further discussions with the Ghanaian government.

The company has not announced that it will immediately pay the full $393.1 million assessment. Ghana’s GRA, however, said it would work with the government and Tullow Ghana to implement the award in accordance with Ghanaian law.

The dispute comes as Tullow focuses its operations on Ghana after restructuring its portfolio and selling assets elsewhere.

The company remains a major producer in Ghana through its interests in the Jubilee and TEN fields. The Ghanaian government has said it wants the resolution of outstanding tax matters while maintaining the continuity of oil production and investment in the two fields.

Tullow’s shares fell sharply after news of the arbitration ruling, reflecting investor concerns over the potential financial impact of the tax dispute. Reuters reported that the shares were down more than 30% in early trading on Sept. 30.

The ruling adds to financial pressure on the London-listed oil producer as it works to manage its debt and concentrate its operations on its core assets in Ghana.