Ghana’s Institute of Economic Affairs (IEA) has issued a strong appeal to President Mahama to suspend plans extending Tullow Oil’s petroleum licenses to 2040, advocating instead for comprehensive sector reforms.
The policy think tank warns that prolonging the current agreement would perpetuate fiscal losses and governance gaps in Ghana’s oil industry.
The IEA’s critique follows reports of a Memorandum of Understanding to extend Tullow’s operations in the West Cape Three Points and Deepwater Tano blocks, currently set to expire in 2036. In a detailed statement, the institute outlined five key objections: unresolved tax disputes exceeding $700 million, an outdated colonial-era concession model, unfavorable comparisons to Norway’s resource management, premature erosion of Ghana’s bargaining power, and insufficient transparency in negotiation processes.
“Norway earned nearly triple per barrel what the UK did from comparable oil production through strategic governance,” the IEA noted, highlighting how Ghana’s current framework fails to maximize national benefits. The group proposes converting Tullow’s contract to a service agreement—where Ghana retains resource ownership—mirroring models in Norway and Middle Eastern producers.
The call comes amid lingering arbitration cases, including Tullow’s successful challenge of a $320 million tax assessment, which cost Ghana over $1 million in legal fees. With 11 years remaining on existing licenses, the IEA argues Ghana now possesses the technical and legal capacity to renegotiate terms favorable to national development.
Energy analysts suggest the IEA’s intervention could influence upcoming parliamentary debates on petroleum agreements. As Ghana seeks to optimize returns from dwindling oil reserves—projected to peak by 2030—the government faces mounting pressure to align extractive sector practices with its governance reform agenda.
