Declaring that the petroleum licenses of Tullow Oil and its partners should not be extended, the Institute of Economic Affairs (IEA) has asked President John Mahama to rescind the agreement.
According to recent news reports, the government signed a Memorandum of Understanding extending Tullow Oil’s and its partners’ petroleum licences until 2040.
The IEA argues, however, that the change lacks openness and accountability.
The IEA’s June 16, 2025 statement claims that the government’s stated aim of “resetting and strengthening governance of the extractive sector” is “broadly at odds” with what the organisation “considers this decision to lack good faith, transparency, probity, and accountability”.
According to the IEA, a number of well-publicized international arbitration conflicts have caused Tullow’s operational relationship with Ghana to be difficult and call questions on the validity of the current Petroleum Agreement.
One significant instance of this was when the Ghana Revenue Authority (GRA) evaluated BPRT liabilities of USD 320 million against Tullow for the period 2012–2016 following an exhaustive review. Tullow allegedly disregarded the allegation and instead contested it in an arbitration panel abroad.
Under the Petroleum Agreement, the International Chamber of Commerce (ICC) in London decided in Tullow’s favour; the IEA recalled.
Tullow was not liable for paying the USD 320 million tax debt, according to the International Chamber of Commerce (ICC) in London, which also instructed Ghana to pay significant costs related with the litigation and arbitration, including GBP 1,946,509.44, USD 294, 228.00, and USD 574,000.00 in tribunal and ICC fees, plus interest at a rate of 5% annual until full payment is made.
Based on allowed interest deductions from 2010 to 2020, Tullow’s nonpayment of a further GRA-assessed tax obligation of USD 387 million has the IEA concerned.
The IEA shockingly noted that Tullow had turned to arbitration with the ICC instead of paying the agreed upon sum, which was a major change.
Originally set to expire in 2036, the IEA asked that the government stop the Tullow’s petroleum licenses’ expiring immediately.
Respected the almost two million votes cast in the 2024 elections—one of the largest electoral margins in the Fourth Republic—we strongly advise the President to start a thorough overhaul of Ghana’s petroleum governance structure. The institution makes it abundantly evident that all petroleum agreements have to contain measures for process integrity.
The IEA says that a thorough review and restructure of the present agreement must precede any extension or extraction of petroleum, a limited national resource, so ensuring compatibility with Ghana’s long-term development goals.
In line with national sovereignty, sustainable development, and intergenerational equality, we owe it to our children and next generations to responsibly and boldly manage Ghana’s natural resources. The IEA said a reset was much needed.
