IEA Opposes Extension of Tullow Oil’s Petroleum Licences, Demands Reset of Agreement
The Institute of Economic Affairs (IEA) has called on President John Mahama to immediately suspend the extension of petroleum licences granted to Tullow Oil and its partners, arguing that the process lacks transparency, accountability and goes against government’s own commitment to improve governance in the extractive sector.
This follows media reports that the government had signed a Memorandum of Understanding (MoU) to extend the petroleum licences of Tullow Oil and its partners from 2036 to 2040.
In a strongly worded statement issued on Sunday, June 16, 2025, the policy think tank described the move as one that “lacks good faith, transparency, probity and accountability,” and urged the President to honour the electoral mandate secured in the 2024 elections by initiating a “transformative reset” of Ghana’s petroleum governance regime.
“The IEA considers this decision to lack good faith, transparency, probity and accountability, and to be starkly at odds with the Government’s own commitment to reset and strengthen governance of the extractive sector,” the Institute noted.
The IEA cited a series of disputes between Tullow and the Ghana Revenue Authority (GRA) as evidence of a strained operational relationship, particularly highlighting an earlier case where GRA imposed a Branch Profit Remittance Tax (BPRT) liability of USD 320 million covering 2012–2016. Tullow, however, refused to comply and contested the claim through international arbitration.
“In the ensuing proceedings, the London-based International Chamber of Commerce (ICC) ruled in favour of Tullow, declaring the company was not liable to pay the tax and further ordered Ghana to pay significant legal and arbitration costs,” the IEA recounted.
Per the ruling, Ghana was directed to pay GBP 1.95 million, USD 294,228 and USD 574,000 in legal and tribunal fees, in addition to 5% annual interest on the amounts until full payment.
The IEA also revealed an ongoing USD 387 million tax dispute involving Tullow, this time relating to disallowed interest deductions for the period 2010 to 2020. The company has once again opted to challenge the GRA’s assessment through international arbitration at the ICC.
“These developments raise serious concerns about the integrity and enforceability of the existing petroleum agreement. It is alarming that, despite these repeated disputes, government is seeking to reward Tullow and its partners with a licence extension,” the IEA stated.
The think tank urged the government to immediately halt the extension process and conduct a comprehensive, strategic review of the agreement in line with national interest and long-term development goals.
“In the spirit of intergenerational equity, sustainable development and national sovereignty, we owe it to ourselves, our children, and generations yet unborn to steward Ghana’s natural resources with courage and foresight. A reset is long overdue,” it concluded.
