TOR dumps PetroSaudi deal

The Tema Oil Refinery (TOR) will no longer need a foreign strategic partner to turn around the fortunes of the refinery, Mr Kingsley Kwame Awuah Darko, acting Managing Director of the refinery, has hinted.

The state-owned refinery was at the concluding stages of closing a deal with PetroSaudi International, but that arrangement will not pull through based on the conviction of the refinery’s new Managing Director that local workers have the capacity to make the refinery a profit-making entity.

Mr. Awuah Darko told The Finder the time for the PetroSaudi agreement has elapsed and that it was not likely a deal will be concluded.

“So we are taking legal advice, but I don’t believe it is a path I personally would want to take,” he said.

He holds a strong belief that state assets and state institutions can work and be run as profitable as any private entity.

“I am not a believer that TOR needs a foreign strategic partner to operate. I believe that the refinery has the men and women to be able to take this to the next level”, he emphasised.

Mr. Awuah made these revelations when he joined workers of the refinery at a thanksgiving ceremony to mark the changing fortunes of the refinery under his watch.

According to him, the refinery is currently producing high-quality petroleum products for Ghana and the West African sub-region.

“Our products are not only consumed locally, they are exported into the sub-region.”

He said the refinery, in collaboration with Bulk Oil Storage and Transport company (BOST), has been able to process almost 2 million barrels of crude oil, “non-stop, on spec., on time”.

“The major problem we have is that our barns are overflowing. So when we go for production meetings, the story that we hear are that if we don’t sell or evacuate we have to shut down the plant”.

Additionally, the company made a profit of $800,000 on its first 1 million barrels of crude out of the 2 million barrels the company has refined after it resumed production some months ago.

He noted that although accounting on the remaining 1 million barrels is not yet completed, indications are that the company will make a profit of $ 1.5 million.

Dealing with TOR’s debts

Mr. Awuah further hinted that TOR is in the process of restructuring its debts and finding innovative ways of clearing them.

In furtherance of this, he said the refinery has reached an agreement with four banks and have been able to restructure ?1 billion of its debts into a 10-year bond, of which details are being worked out.

He was hopeful that the restructuring of the remaining ?1 billion of the company’s debt will be completed by the end of the second quarter, a move that will knock off all the refinery’s debts.

He added that the company is currently working on a turnaround maintenance, which, he said, was also on schedule and will happen between August and September, by which time a new crude oil furnace would have been commissioned to up the refinery’s capacity to 60,000 barrels.

“By the time we finish our turnaround maintenance, our refinery will be back to full capacity of 60,000, meeting a bigger percentage of over 50% of our national consumption.”

TOR/BOST collaboration

The new acting manager of the refinery further indicated that changing fortunes of the refinery was made possible with the support of the workers and a mutually beneficial agreement the refinery entered into with BOST, which made it possible for the refinery to have constant crude to refine.

“The strategy that BOST has today is to shift its strategic petroleum reserve programme from the import of refined products to the import of crude oil for Tema Oil Refinery so that you can assure Ghanaians of high-quality petroleum products and assurance of supply.

“So in that sense we got a lot of support from BOST and there was a lot of synergy, bearing in mind that BOST has a significant market share of the petroleum market in Ghana.”

Staff welfare

He said management will continue to negotiate with the union in good faith to ensure a shared prosperity of the company.

He mentioned that the company is currently moving away from an entitlement-based culture to a performance-based one and that 10% of all profit made, going forward, are going to be put into a profit-sharing pool to be allocated to workers based on their contribution and commitment to the company.

He also pledged his commitment to abolish the concept of casual workers at the refinery.