IEA opposes Tullow license extension over tax disputes
The Institute of Economic Affairs (IEA) is calling on President John Dramani Mahama not to extend the petroleum licenses of Tullow Oil and its partners, urging instead a reset of the agreement in the best interest of Ghana’s petroleum governance.
Recent media reports suggest that the government has signed a Memorandum of Understanding (MoU) to extend Tullow’s petroleum licenses from their current expiration in 2036 to 2040 — a move the IEA says lacks accountability, fairness, and transparency.
“The IEA considers this decision to be a departure from good faith, fairness, probity, and accountability and directly at odds with the government’s own commitment to reset and strengthen governance in the extractive sector,” a statement issued by the IEA on Monday, June 16, 2025, said.
The IEA expressed serious concerns about Tullow’s operational relationship with Ghana, highlighting a series of high-profile international arbitration disputes that, it argues, raise questions about the fairness and robustness of the current 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 pay and challenged the claim through international arbitration,” the IEA recounted.
In the resulting arbitration, the International Chamber of Commerce (ICC) in London ruled that Tullow was not liable to pay the USD 320 million in taxes and further directed Ghana to cover substantial legal and arbitration-related costs. These include GBP 1,946,589.44, USD 294,228.72, and an additional USD 574,000.00 in tribunal and ICC fees — all accruing interest at 5 percent per annum until paid in full.
The IEA also highlighted another ongoing dispute, in which Tullow is contesting a GRA-assessed additional liability of USD 387 million stemming from disallowed interest deductions made by the company between 2010 and 2020. Once again, Tullow opted for arbitration at the ICC instead of honoring its financial obligations, the IEA noted.
The think tank described these disputes as damaging to government revenue, financial stability, and the credibility of Ghana’s extractive sector policies.
The IEA is therefore urging the government to suspend any move to extend Tullow’s licenses, which are set to expire in 2036.
“We call on the President to honor the more than 2-million-vote margin in the 2024 elections, one of the largest electoral margins in the Fourth Republic, by initiating a transformative reset of Ghana’s petroleum governance framework. Specifically, this should include employing process integrity mechanisms in all petroleum agreements to safeguard the country’s financial and strategic interests,” the IEA emphasized.
