Ghana’s government faces mounting pressure to exercise extreme caution before approving an early contract renewal for Tullow Oil Ghana, with former Speaker of Parliament Professor Aaron Mike Oquaye warning that hasty decisions could expose the nation to significant financial vulnerabilities.
Speaking at a policy dialogue organized by the Institute of Economic Affairs (IEA) in Accra, Prof. Oquaye pointed to Ghana’s recent arbitration defeat against Tullow Oil as a stark reminder of what’s at stake. The International Chamber of Commerce ruled in early January 2025 that Ghana would not receive a $320 million Branch Profit Remittance Tax assessment from Tullow, a decision that left Ghana footing the company’s legal costs.
“The recent arbitration award by the ICC in the case of Tullow versus the Republic of Ghana in London should teach us a lot,” Prof. Oquaye told the gathering, his tone reflecting the gravity of the situation.
What concerns the former Speaker most is the timing. Tullow Oil has requested a memorandum of understanding for contract renewal despite having ten to eleven years remaining on its current operating licence. It’s an unusual move that raises questions about the company’s motivations, especially considering it has simultaneously flagged another potential tax dispute while reporting operational losses.
Prof. Oquaye didn’t mince words about Ghana’s contractual position. The existing agreements with Tullow contain clauses that have already proven problematic, creating openings the company has successfully exploited. These vulnerabilities have become painfully clear through the arbitration outcome, which demonstrated how exposed Ghana’s position can be under current arrangements.
The government has already signed a memorandum of understanding with Tullow and its partners, including Kosmos Energy, PetroSA, and the Ghana National Petroleum Company, but Prof. Oquaye urged officials to halt any further progress. “I will want to plead with government that they should not move any further,” he stated emphatically.
His broader call extends beyond just the Tullow situation. Prof. Oquaye emphasized that Ghana needs stronger transparency mechanisms, better contract management, and a comprehensive review of petroleum agreements to prevent similar fiscal setbacks.
The warning comes with added weight given Prof. Oquaye’s unique perspective on the issue. As Minister of Energy from 2005 to 2006, he was the official who signed the original agreement with Tullow that led to Ghana’s first oil discovery. His intimate knowledge of these contracts makes his concerns particularly significant.
Tullow continues to engage with the Government of Ghana on two additional disputed tax claims totaling $387 million plus penalties, which were referred to the ICC in February 2023. These ongoing disputes add urgency to Prof. Oquaye’s call for careful scrutiny before committing to any new arrangements.
The former Speaker’s message is clear: Ghana must not repeat the mistakes that have already cost the nation hundreds of millions in potential revenue. As Tullow pushes for early renewal, the government now faces intense scrutiny over whether it will heed the cautionary tales of past agreements or rush into decisions that could haunt the nation for years to come.
Without comprehensive reforms to how petroleum agreements are managed, the country risks continuing a pattern where foreign companies exploit contractual vulnerabilities while Ghanaians receive diminished benefits from their own natural resources.