The Institute of Economic Affairs (IEA) has strongly cautioned President John Dramani Mahama against endorsing what it calls a “premature and problematic” extension of petroleum licenses for Tullow Oil and its partners, arguing that such a decision would undermine efforts to reform Ghana’s extractive sector governance.
The warning follows media reports that the government has signed a Memorandum of Understanding (MoU) that could extend the oil giant’s operating license to 2040—four years before the current contract’s expiration in 2036.
In a statement issued on June 16, 2025, the policy think tank criticised the move as lacking transparency and betraying the President’s own commitment to reform Ghana’s natural resource management.
“This decision flies in the face of the President’s stated commitment to reset governance in the petroleum sector. It lacks transparency, accountability, and due process,” the IEA declared.
Arbitration History Undermines Confidence
The IEA highlighted Tullow Oil’s troubled tax history in Ghana, referencing a USD 320 million tax dispute with the Ghana Revenue Authority (GRA), which Tullow challenged through international arbitration. The London-based International Chamber of Commerce (ICC) eventually ruled in Tullow’s favour, and ordered Ghana to pay millions of dollars in legal costs.
A fresh tax controversy involving USD 387 million in disallowed interest deductions—also being contested through arbitration—further weakens Tullow’s credibility, the IEA noted.
“Rather than cooperating with national authorities, Tullow has consistently opted for foreign arbitration, placing Ghana in a disadvantaged position in managing its own resources,” the think tank lamented.
Call for a Comprehensive Sector Reset
The IEA is not merely opposing the license extension on procedural grounds. It is calling for a comprehensive overhaul of Ghana’s petroleum governance framework before any further commitments are made.
It argues that oil, being a non-renewable national asset, should be managed with long-term developmental goals in mind—not short-term contract renewals that may serve foreign interests over Ghanaian priorities.
“We must act in the spirit of intergenerational equity. The extension of any petroleum agreement should follow a rigorous, participatory, and strategic review process,” the IEA advised.
A Test of Political Will
The institute challenged President Mahama to use his renewed electoral mandate to usher in transformative reforms rather than entrench flawed legacy agreements.
“The President was given a historic mandate in the 2024 elections. That political capital must be used to reset the petroleum governance regime, not reinforce opaque arrangements,” the statement concluded.
As civil society groups increasingly demand transparency and accountability in the extractive sector, the IEA’s position signals mounting pressure on the Mahama administration to revisit its approach to resource governance. The call for a license extension freeze may reign
