IEA opposes Tullow Oil license extension, calls for sector overhaul

The Institute of Economic Affairs (IEA) is urging President John Mahama to halt plans to extend the petroleum licenses of Tullow Oil and its partners, calling instead for a complete reset of Ghana’s petroleum governance framework.

The think tank’s call follows recent reports that the government has signed a Memorandum of Understanding to extend Tullow’s licenses until 2040, a move the IEA decries as lacking transparency, integrity, and accountability.

The institute pointed to a history of friction between Tullow and the Ghanaian state, particularly citing international arbitration battles that have led to significant financial and reputational losses for the country.

One such case involved a USD 320 million tax liability imposed by the Ghana Revenue Authority (GRA) on Tullow for 2012–2016. Tullow disputed the assessment and won a ruling at the International Chamber of Commerce (ICC) in London, which absolved the company of the tax burden and ordered Ghana to cover hefty legal and tribunal fees—amounting to over GBP 1.9 million and nearly USD 900,000, with 5% annual interest until full payment.

The IEA also flagged a pending dispute involving a further USD 387 million in contested taxes based on disallowed interest deductions from 2010 to 2020—a case Tullow has again referred to arbitration instead of resolving locally.

In light of these developments, the IEA is demanding that the government immediately suspend the license extension process, originally set to expire in 2036. The think tank argues that extending extractive contracts without meaningful reform undermines the national interest.

Describing petroleum as a depletable national asset, the IEA insists that any further extraction must follow a thorough review of the current agreement to align it with Ghana’s long-term goals.