The Institute of Economic Affairs (IEA) has appealed to President John Mahama not to extend the petroleum licenses of Tullow Oil and its partners, demanding a reset of the deal.

Recent reports in the media said government had signed a Memorandum of Understanding to extend the petroleum licenses of Tullow Oil and its partners to 2040.

However, the IEA has described the move as lacking accountability and transparency.

“The IEA considers this decision to lack good faith, transparency, probity, and accountability, and to be starkly at odds with the Government’s own commitment to reset and strengthen governance of the extractive sector”, a statement released by the institute on June 16, 2025 said.

The IEA argued that Tullow’s operational relationship with Ghana has been riddled with challenges, including a series of high-profile international arbitration disputes that casts a shadow of doubt over the existing Petroleum Agreement.

“A notable instance occurred when the Ghana Revenue Authority (GRA) assessed a Branch Profit Remittance Tax (BPRT) liability of USD 320 million against Tullow for the period 2012–2016, following a thorough audit. Tullow refused to comply and challenged the claim through international arbitration”, it said.

The IEA recounted that in the ensuing proceedings under the terms of the Petroleum Agreement, the International Chamber of Commerce (ICC) in London ruled in favour of Tullow.

“The London-based ICC held that Tullow was not liable to pay the USD 320 million tax liability and further directed Ghana to pay substantial legal and arbitration-related costs, including GBP 1,946,589.44, USD 294,228.72, and USD 574,000.00 in tribunal and ICC fees—with interest accruing at 5% per annum until payment is made in full”.

The IEA said it is alarmed about another tax dispute in which Tullow has refused to pay and is contesting an additional GRA-assessed tax liability of USD 387 million, based on disallowed interest deductions from 2010 to 2020.

More worrying the IEA pointed out that Tullow has once again opted for arbitration at the ICC rather than settling the assessed amount.

The IEA urged government to immediately suspend the ongoing process to extend Tullow’s petroleum licenses—originally due to expire in 2036.

“We call on the President to honour the over 2 million votes margin in the 2024 elections—one of the highest electoral margins in the Fourth Republic—by initiating a transformative reset of Ghana’s petroleum governance regime. Specifically, deploying process integrity mechanisms in all petroleum agreements”, the institute appealed.

According to the IEA, given that petroleum is a depletable national asset, any extension and extraction must be preceded by a comprehensive and strategic review and restructuring of the existing agreement to ensure alignment with Ghana’s long-term development goals.

“In the spirit of intergenerational equity, sustainable development, and national sovereignty, we owe it to ourselves, our children, and generations yet unborn to steward Ghana’s natural resources with courage and foresight. A reset is long overdue”, the IEA said.