Ghana may have won its tax arbitration against Tullow Oil, but a leading tax lawyer says the victory should not make the state comfortable.
Tax expert and lawyer Francis Timore-Boi says the ruling carries a lesson for those who draft petroleum agreements for the country. He made the remarks in an interview monitored by The High Street Journal.
“It’s a lesson for the state, especially those who are in charge of the petroleum agreement drafting to be careful,” he said.
Francis Timore-Boi pointed out that the outcome could have gone the other way. According to him, Ghana succeeded because the argument that the petroleum agreement had been breached was not successful. Had Tullow’s argument based on a breach of the petroleum agreement succeeded, he said, the state would have lost the judgement.
He also recalled that Tullow won a case in 2025 on the grounds of a breach of a petroleum agreement. For him, that case and this one point to the same thing: such contracts carry great weight.
“Petroleum agreements are treated with the highest esteem,” he said.
This, he explained, is why the government must take great care when it signs them. Every detail in the document matters, because arbitration tribunals read the agreement as written.
He cautioned that, “When government is entering such agreements, we need to be careful and make sure that all the I’s and the T’s are dotted. Otherwise, the state is going to lose a lot.”
His comments come as Ghana continues to rely on the extractive sector for revenue, and as tax disputes with oil companies can involve very large sums. In this case, the amount in contention was $393 million.
The tax expert maintains that drafting is where the contest is won or lost. A well-written agreement protects the state’s right to tax. A loosely written one can leave the door open to costly disputes.
His remarks add to a wider conversation on how the state negotiates and manages its petroleum contracts. Whether drafting practices will change after this ruling remains to be seen.
