The Institute of Economic Affairs (IEA) has firmly opposed the government’s proposed extension of petroleum licences held by Tullow Oil and its partners until 2040, citing concerns over transparency, accountability, and long-term national interest.
In a statement dated June 16, 2025, the IEA called for an immediate halt to the extension process, urging government to conduct a comprehensive and strategic review of existing petroleum agreements before pursuing further exploration or production.
“We must not compound existing problems by embedding them into future agreements. A reset is long overdue,” the think tank stated.
According to the IEA, Ghana’s current contractual model, described as a “colonial-era” concession agreement, is outdated and does not serve the country’s best interests. The group called for a transition to modern service contract frameworks used in countries such as Norway and Saudi Arabia, which retain state ownership of natural resources while outsourcing specific services to private firms.
“The current colonial contract will never inure to the benefit of Ghana and its citizens,” the statement warned.
The IEA also raised red flags over Tullow’s history of tax-related disputes with the Ghana Revenue Authority (GRA), including a USD 320 million Branch Profit Remittance Tax (BPRT) assessed for 2012–2016. The case was taken to arbitration at the International Chamber of Commerce (ICC) in London, where Ghana lost and was further ordered to pay nearly USD 1 million in legal costs and interest.
Additionally, Tullow is contesting another USD 387 million tax liability from the GRA concerning disallowed interest deductions between 2010 and 2020. This matter is also before an international arbitration panel.
“This pattern of tax resistance and international arbitration undermines Ghana’s sovereignty and fiscal interests,” the IEA cautioned.
The statement also drew a comparison between Ghana and countries with more efficient oil governance models, noting that by 2014, Norway was earning nearly USD 30 per barrel from its North Sea oil, while the UK earned only USD 11 per barrel. Norway’s approach—rooted in a state-led model and transparent fiscal policy—has resulted in a sovereign wealth fund now valued at over USD 1.4 trillion.
The IEA concluded by urging President John Dramani Mahama to take bold steps under his administration’s “Reset Agenda” to reform Ghana’s petroleum sector. It emphasised that the government has a historic opportunity to renegotiate better terms for the country’s future.
“Mr President, the nation stands with you. The time for change is now. Our future depends on it,” the statement concluded.
Source: Ghana/Starrfm.com.gh/Emmanuel Mensah
