TOR feels disarmed

The arrangement by government for the Ghana National Petroleum Corporation (GNPC) to supply the Bulk Oil Storage and Transportation Company (BOST) with petroleum products has ruffled feathers at the Tema Oil Refinery, with workers calling for a reversal of the decision.

Workers at the refinery feel the arrangement goes to confirm sentiments that those who benefit from the status quo -- the crippled state of TOR --are leaving no stone unturned to ensure a deepening of the refinery’s woes.

They do not understand why the GNPC -- an entity that is supposed to focus on finding oil for Ghana -- has all of a sudden become a downstream player, supplying products to BOST.

“It beats our understanding as to what is informing GNPC’s involvement in downstream activities,” Daniel Fugah, Chairman of TOR’s Senior Staff Association told the B&FT.

“The question the workers are asking is: what stops government from supporting TOR to keep the facility in shape? It is good for government to say it is going to restructure TOR, but in the in the interim should we leave the facility there to get rotten?”

He added that: “The guys against Tema Oil Refinery condemn it and make it look like it is bad and not worth supporting. But I would like to assure the people of this country that TOR is a viable organisation. It just needs a little support, a little push, and it will deliver.”

TOR has been struggling to raise Letters of Credit from the banking sector to import crude and refine; the banks have been holding back due to challenges they face in recouping forex exchange losses that arise out of the LCs.

In the milieu, plants at the refinery are not running, and it has been reduced to holding stocks of products for third parties -- private bulk distribution companies that do not have their own storage facilities.

In 2010, a consultant hired by government suggested that the refinery be given some US$67million to help it retool. In 2012, government released US$30million as part-payment. The remainder is yet to be released, if it ever will.

Government has meanwhile been talking about restructuring TOR to bring it up to the level of a “world-class refinery”.

Cabinet, in 2013, set up a two-tier structure to develop and operationalise a public-private partnership arrangement through a joint venture deal between TOR and PetroSaudi.

The joint venture company, named TOR-PS, was incorporated in September 2014.

“Business Plan discussions have been earnestly going on and a commercial framework for the restructuring is being finalised,” said Emmanuel Armah-Kofi Buah, Energy and Petroleum Minister at a Meet the Press recently.

“Discussions have been held on the shareholders agreement, as well as government support and consent agreement and other related off-takers agreements.

“The management of TOR is equally aggressively negotiating with international and local financial institutions for funding to execute their annual mandatory maintenance and also to fund the supply of feedstock/crude, pending completion of negotiations on various agreements.”

Reacting to questions regarding rumours that government plans to sell the refinery, the minister said: “Tema Oil Refinery is not for sale; not under my watch, not under the watch of his Excellency the President. 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 losses”.