Accra: The Institute of Economic Affairs (IEA) has called on President John Dramani Mahama to suspend the ongoing process to extend Tullow Oil’s petroleum licences, citing concerns over transparency, accountability, and long-term national interest.
According to Ghana News Agency, in a statement, the IEA criticised the reported signing of a Memorandum of Understanding (MoU) to extend Tullow’s agreements in the West Cape Three Points and Deepwater Tano blocks until 2040-four years beyond the original expiry date of 2036. The think tank warned that any such extension without a comprehensive review and restructuring would perpetuate an outdated and unbalanced agreement that does not serve the best interest of Ghana.
The IEA pointed to Tullow’s history of legal disputes with Ghana, including a $320 million tax assessment by the Ghana Revenue Authority (GRA) for 2012-2016. Tullow challenged the assessment at the International Chamber of Commerce (ICC) in London, where the tribunal ruled in its favour. Ghana was ordered to pay nearly £2 million in legal fees, over $800,000 in additional charges, plus interest. The Institute also cited a separate $387 million tax dispute, covering disallowed interest deductions from 2010 to 2020, which Tullow is again contesting through international arbitration.
According to the IEA, these repeated confrontations highlight systemic flaws in Ghana’s petroleum governance and fiscal regimes. The Institute urged the government to abandon colonial-era concession contracts in favour of service contracts like those used in Norway, Qatar, and Abu Dhabi, where the state retains ownership of resources and hires private firms purely for service delivery, leading to improved oversight and revenues.
Citing international examples, the IEA compared Norway and the UK, both of which began offshore oil exploration in the 1960s. Though oil volumes were similar-42.8 billion barrels for the UK, 40 billion for Norway-Norway earned $29.8 per barrel, against the UK’s $11, amassing over $1.1 trillion by 2014 and building the world’s largest sovereign wealth fund.
The Institute stressed that Ghana must now negotiate from a position of strength, insisting that the current circumstances provide a historic opportunity for President Mahama to reset the petroleum governance framework. It underscored the need for reforms grounded in transparency, strategic planning, and national interest, cautioning that extending existing agreements without addressing past failings and financial liabilities would amount to embedding current problems into future arrangements.
The IEA urged President Mahama to leverage his electoral mandate to introduce bold reforms, safeguard Ghana’s sovereign interests, and ensure its natural resources benefit both present and future generations.