The Institute of Economic Affairs (IEA) is calling on President John Mahama to reverse course on an extension of petroleum licenses for Tullow Oil and its partners, insisting that any new arrangement should begin with a comprehensive reset.
The call comes in the wake of media reports suggesting government has signed a Memorandum of Understanding to prolong Tullow’s licenses until 2040. According to the IEA, such a decision falls short of the standards Ghanaians expect in resource governance.
“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,” a statement released by the institute on June 16, 2025, said.
Highlighting a history of disputes between Tullow and Ghanaian authorities, the IEA pointed to several international arbitration cases that have tested the Petroleum Agreement.
The institute noted that a key example was when the Ghana Revenue Authority (GRA) slapped a USD 320 million Branch Profit Remittance Tax liability on Tullow for the 2012–2016 period after an audit. Tullow challenged the claim in international arbitration.
“A notable instance occurred when the Ghana Revenue Authority (GRA) assessed a Branch Profit Remittance Tax (BPRT) liability of USD 320 million against Tullow for the period 2012–2016, following a thorough audit. Tullow refused to comply and challenged the claim through international arbitration,” it said.
The ICC in London eventually ruled in favour of Tullow, ordering the Government of Ghana to foot the bill for legal and arbitration fees.
“The London-based ICC held that Tullow was not liable to pay the USD 320 million tax liability and further directed Ghana to pay substantial legal and arbitration-related costs, including GBP 1,946,589.44, USD 294,228.72, and USD 574,000.00 in tribunal and ICC fees with interest accruing at 5% per annum until payment is made in full.”
The IEA expressed alarm over another ongoing tax issue involving a USD 387 million liability, which Tullow is also contesting through arbitration. The liability stems from disallowed interest deductions between 2010 and 2020.
The institute questioned why such a record should be rewarded with a license extension. It called on government to place the process on immediate hold, reminding the President of the mandate received from voters in the last election.
“We call on the President to honour the over 2 million votes margin in the 2024 elections one of the highest electoral margins in the Fourth Republic by initiating a transformative reset of Ghana’s petroleum governance regime. Specifically, deploying process integrity mechanisms in all petroleum agreements,” the institute appealed.
According to the IEA, Ghana’s oil wealth must be protected for present and future generations. It urged a careful and deliberate approach before any further extraction occurs.
“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,” the IEA said.
