Tullow Oil has recorded a loss after tax of US61 million loss recorded over the same period in 2025, according to the oil producer’s half-year financial report released to investors.
The loss was primarily driven by refinancing costs and other fees, including one-off refinancing transaction fees amounting to US64 million in cash interest payments. Despite the loss, the company recorded revenue of US276 million during the period, representing a significant improvement from US165 million gross profit in the first half of 2025.
The results come amid a turbulent period for the Africa-focused oil and gas company, which completed a comprehensive refinancing transaction on 27 April 2026, extending its Senior Secured Notes and Glencore facility to November 2028 and May 2030 respectively, and securing a new US$100 million facility.
A Transformational Presence in Ghana
Tullow’s operations in Ghana began in 2006, and a year later, the world-class Jubilee field was discovered, with first oil achieved in December 2010. This milestone marked Ghana’s emergence as a new player in West Africa’s energy industry. Further exploration activities resulted in the Tweneboa, Enyenra and Ntomme (TEN) discoveries in the Deepwater Tano block, with first oil from TEN in 2016.
Over the past two decades, Tullow has invested over US6 billion to the Government of Ghana through taxes and entitlements. The company has been listed on the Ghana Stock Exchange since 2011 and remains the country’s largest petroleum producer, with Ghanaians making up the overwhelming majority of its workforce.
Strong Production Performance
Tullow said its turnaround strategy is beginning to yield results, particularly in production. Net production averaged 35.7 thousand barrels of oil per day (kbopd) in the first half of 2026, contributing to group working interest production of 43.7 kboepd, up from 40.6 kboepd in the prior year period.
The company attributed the performance to strong production from new wells and work completed during the successful 2025 Jubilee scheduled shutdown. It also highlighted FPSO uptime averaging over 99% and production optimisation activities, including dual-riser operations and riser-based gas lift.
“A number of existing wells drilled in the previous campaign have seen the benefit of production optimisation activities in the first half of 2026,” the company said.
Gross oil production from the TEN fields averaged 14.8 kbopd, equivalent to net production of 8.1 kbopd, which Tullow said was above expectations. The Jubilee field delivered gross production of approximately 70,800 barrels of oil per day during the first half, with production having surpassed 100,000 bopd following the start-up of the Jubilee South East (JSE) project.
The company completed its 2025-26 drilling campaign in September, with six Jubilee producers and one Jubilee water injector brought onstream. Tullow expects to lift 14 cargoes in 2026, comprising 11 from Jubilee and three from TEN — an increase of two Jubilee cargoes compared with its initial guidance issued in November 2025.
Reserves Growth and Improved Cash Flow
The strong operational performance has delivered material reserves growth, with approximately 380% reserves replacement in the first half of the year. The company also generated positive free cash flow of US188 million outflow a year earlier.
Tullow has raised its 2026 free cash flow guidance to between US250 million, up from a prior range of US175 million.
Government Extends Development Agreement
Tullow highlighted the government’s decision to extend the development agreement covering the Jubilee and TEN fields. According to the company, the extension provides a stable investment environment, alongside a gas payment security mechanism and heads of terms for the potential supply of gas from the TEN fields.
The company is preparing a 10-well drilling campaign covering 2027-28 (Campaign 2) and progressing plans to acquire the TEN FPSO.
The Shadow of a US$393 Million Tax Dispute
The half-year loss comes as Tullow continues to deal with the fallout from a bruising tax dispute with the Ghana Revenue Authority (GRA). An International Chamber of Commerce arbitration tribunal in London ruled in favour of the Ghanaian government in a dispute involving a US$393,091,993.70 tax charge against Tullow, including a 100% penalty.
The dispute related to corporate income tax on business interruption insurance proceeds received by Tullow between 2016 and 2019. Tullow had challenged the assessment, arguing that it breached the terms of Ghana’s Petroleum Agreement. The tribunal, however, ruled in favour of Ghana, finding that the government’s action was within the law and that the penalties were not covered by contractual protections.
The ruling sent Tullow’s shares plunging by approximately 50% on 30 September 2026, as investors reacted to the company’s loss of a critical arbitration case.
GRA Commissioner-General Anthony Kwesi Sarpong said the authority would work with Tullow to resolve the tax liability without disrupting the company’s operations in Ghana’s petroleum sector. “The GRA welcomes the news of victory at the London Arbitration sustaining a tax claim of over US$393 million,” he said, describing Tullow as an important business partner in Ghana’s petroleum sector.
Government Committed to Protecting Partnership
Finance Minister Dr Cassiel Ato Forson has said government will ensure Ghana receives revenues due from Tullow Ghana Limited following the country’s victory in the international tax arbitration, while simultaneously safeguarding the company’s ability to sustain its operations and investments in Ghana.
Dr Forson described Tullow as “a vital partner to Ghana” and the country’s largest petroleum producer, signalling the government’s intention to preserve a constructive relationship with the oil major despite the legal victory.
The Africa Centre for Energy Policy (ACEP) has also urged both parties to preserve their commercial relationship following the ruling, acknowledging Tullow’s significant contributions to Ghana’s petroleum sector and the importance of continued investment in the Jubilee and TEN fields.
Looking Ahead
Despite the challenges, Tullow’s leadership remains optimistic about the company’s prospects. Chief Executive Officer Ian Perks said the strong operational performance has embedded “strong foundations” to support industry-leading FPSO uptime, water injection efficiency and production optimisation initiatives.
“We are building on this momentum as we seek to create further value through our next drilling campaign in 2027-28 and delivery of other near-term opportunities,” he said. “Supported by our strengthened financial position, disciplined capital allocation and a supportive oil price environment, we are increasingly confident in our ability to unlock the full value of our assets and deliver material cash flow”.
For Ghana, the coming months will test the delicate balance between securing the nation’s rightful tax revenues and retaining the confidence of its most significant petroleum investor. As Tullow navigates its financial and legal challenges, the stakes could hardly be higher — for the company, for Ghana’s oil revenues, and for the communities and workers whose livelihoods depend on the Jubilee and TEN fields.
