The Institute of Economic Affairs (IEA) has expressed serious concern over the government's intent to extend the production licence of Tullow Oil PLC to 2040, warning that such a move could lock Ghana into outdated and unfavorable contractual terms.

This follows the recent signing of a Memorandum of Understanding (MoU) between Tullow and the Government of Ghana, along with joint venture partners Kosmos Energy, PetroSA, the Ghana National Petroleum Corporation (GNPC), and Explorco. The MoU seeks to extend the licences for the West Cape Three Points (WCTP) and Deep Water Tano (DWT) blocks—home to the country’s flagship Jubilee and TEN oil fields.

While Tullow has described the MoU as non-binding and noted that the current contract still has nearly a decade left, the IEA warns that its provisions may pre-empt critical national policy reviews and legislative oversight. “This could lock Ghana into legacy terms that no longer serve the public interest,” the IEA stated.

Under the proposed extension, the joint venture plans to drill up to 20 new wells in the Jubilee field, representing a potential US$2 billion investment over the remaining life of the licences. Tullow said the MoU outlines key principles, including:


  • Increased gas supply from Jubilee and TEN fields to about 130 million standard cubic feet per day


  • A reduced gas price for Jubilee-associated gas


  • A guaranteed reimbursement mechanism for gas sales


  • Investment in capacity-building for GNPC and the Petroleum Commission

Tullow emphasized that all current terms of the WCTP and DWT agreements remain unchanged for now. However, the company anticipates submission of a Jubilee Plan of Development (PoD) Addendum, new gas sales agreements (GSAs), and a formal request for parliamentary approval of the payment security mechanism and licence extensions by Q3 2025.

At a policy roundtable themed “Reviewing Petroleum Agreements for the Good of Ghana”, the IEA argued that any long-term extension of resource licences must be subject to parliamentary approval in line with Articles 181(5) and 268(1) of the Constitution. The think tank stressed that the Supreme Court has consistently ruled that the substance of agreements—not merely their form—determines the need for legislative ratification.

Legal expert and keynote speaker, Victor Anku-Tsede, warned that Ghana risks repeating mistakes made in the mining sector, where investor-friendly contracts and weak enforcement resulted in poor national returns.

He noted that Ghana’s early petroleum agreements contained overly generous terms—low royalties, high cost recovery, stabilisation clauses, and limited state participation—suitable at the time due to the country's frontier status but now outdated.

“These terms were effective in attracting investment, but government revenue shares have remained below global norms—estimated at just 42%, compared to 50–65% in more mature jurisdictions,” Mr. Anku-Tsede said.

To address these concerns, he proposed:


  • A Petroleum Agreement Review Committee


  • Introduction of reopener clauses in future contracts


  • Greater public access to petroleum contracts via a central portal


  • Reforms to the Petroleum Revenue Management Act (PRMA) to better support energy transition efforts

“The stakes are high,” he warned. “MoUs that shape decades of production and billions in public revenue must not bypass Parliament. We must move from informal deals to enforceable mandates, and from opaque negotiations to democratic accountability.”

Former Chief Justice Sophia Akuffo also weighed in, questioning the rationale behind extending Tullow’s licence by an additional four years, especially given a recent tax arbitration ruling that cost Ghana significantly.

“Let’s take a step back, assess the outcomes of past deals, and ensure alignment with national development goals before committing ourselves again,” she said.

In response, members of the Energy Committee of Parliament assured stakeholders that any final agreement will be subjected to thorough legislative scrutiny.

Collins Adomako-Mensah, Deputy Ranking Member on the Energy Committee and MP for Afigya Kwabre North, confirmed that the Energy Minister had pledged to bring the final agreement before Parliament for approval.

“You can rest assured that the Committee will carry out its duties diligently to protect the national interest,” he stated.

Similarly, Kofi Arko Nokoe, MP for Evalue Ajomoro Gwira, welcomed public input and reaffirmed Parliament’s commitment to ensuring the agreement aligns with the interests of Ghanaians.