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Thursday, September 11, 2014
The Ghanaian government is making plans for its only refining unit, Tema Oil Refinery (TOR) and will host a meeting with shareholders in September to fine tune TOR’s future. The meeting is scheduled for mid-September to discuss shareholders agreement and government support. The meeting will also discuss a consent agreement and other related Off-Taker Agreements, Emmanuel Armah-Kofi Buah, Minister of Energy and Petroleum, said.
The minister told the press, “As a temporary measure, the management of TOR is negotiating with international and local financial institutions for funding to execute their annual mandatory maintenance in October this year.” It was also reported that financial assistance will allow TOR to fund the purchase of feedstock for the refinery pending the completion of negotiation of all Project Agreements, Government Consent and Support Agreements.
There had been talk of TOR being shut down but Buah said on September 9 that TOR was not for sale. “Not under my watch, not under the watch of His Excellency the President.”
Government says it is focused on transforming the Tema Oil Refinery (TOR) into a world-class facility. Currently, TOR needs a minimum $600 million as capital to be able to process crude continuously. TOR has not been operating at full capacity in recent times due to its huge indebtedness and other operational inefficiencies.
“Our focus is to make sure that Tema Oil Refinery is expanded and operating efficiently and has the working capital to get the crude to constantly refine products efficiently without the losses at the levels.” He added, “We know the challenges and we are all passionate about TOR. We have to fix the structural problems and make the refinery more efficient, and that is exactly what we are doing.”
Discussions are said to be ongoing and that the commercial framework to restructure the refinery was being finalized.
“Timelines for negotiation and execution of documents including submission to cabinet and parliament are expected in the last quarter of the year,” Buah said.
He said the management of TOR was aggressively negotiating with international and local financial institutions for funding to execute the annual mandatory maintenance in October and also to fund the supply of feedstock/crude pending the completion of negotiations for all Project Management Agreements and Government Consent and Support Agreements.
There are also a number of measures established to ensure that the Bulk Oil Storage and Transportation Ltd (BOST) performs its core mandate of holding strategic reserve stocks, infrastructure development for storage and transportation of petroleum products. He said among these measures, BOST had engaged TSL Logistics Ltd. on a pilot basis to efficiently manage and operate its depots and to assume liabilities related to stock losses.
“Inter-depot transfer of products has restarted. This will eventually lead to full resumption of the Zonalization Policy, a policy that guarantees efficient, cheaper and uniform pricing and distribution of petroleum products in the country,” the Minister said.
The Minister also said BOST was earnestly working on the formal handover of its barges and tugboats to Volta Lake Transport Companies to enable consistent and cheaper transportation of petroleum products through the Volta Lake. According to him, BOST, in collaboration with the Ministry of Energy and Petroleum, had commenced negotiations with Burkina-Faso on the completion of the Bolgatanga-Bingo (Burkina-Faso) pipeline, which would generate huge foreign exchange revenue for the state through the supply of petroleum products to Burkina Faso, Mali and Niger.
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