The Minister of State at the Ministry of Energy, Herbert Krapa, has stated that the government’s ongoing efforts to secure a strategic partner for the Tema Oil Refinery (TOR) remain a top priority. He expressed confidence that the process should be completed within the next three months, allowing TOR to operate at full capacity once again.
Mr Krapa made this disclosure in a write-up on his Facebook wall after he paid a working visit to TOR and Sentuo Oil Refinery today, Tuesday, 23 July 2024, to familiarize himself with the ongoing restructuring at TOR under its current management led by the Managing Director, Kofi Tagoe Mocumbi.
“Earlier today, I paid working visits to Tema Oil Refinery and Sentuo Oil Refinery. I am happy to announce that together with the Management of TOR, we agreed on a three-month timeline for the resumption of the plant.
“I also announced the government’s plan to immediately revive TOR’s Testing Laboratory for revenue generation. I charged both TOR and Sentuo to see each other as partners and collaborate for the growth of both refineries,” Herbert Krapa wrote on his Facebook Wall.
Commitment of TOR management
Checks by Asaase News following news of the visit of the minister of state at the Energy Ministry to TOR Sentuo indicate that Mr Kofi Tagoe Mocumbi, in his interaction with the minister, also assured him that TOR has commenced the process of selecting a strategic partner to help revamp it and also to expand its operations.
Mr Mocumbi also indicated that the three-month window targeted for the process to be completed is attainable and the management of TOR would work with that timeline to ensure that TOR gets a reliable partner to restore its operations.
Background
Tema Oil Refinery has never been a profit-making asset of the country. The historical records will show that the debt of the refinery nearly collapsed Ghana Commercial Bank 20 years ago. This led to the introduction of the “TOR Debt Recovery Fund Levy”. This fund was enacted into law in 2003 as Act 642.
In 2003, the TOR debt stood at GHc 450 million. ACEP in October 2021 put out a report called Plugging the Two-Decade Leak to give an insight into the debt and challenges at TOR. In section three of that report, ACEP reported that: “Between 2014 and 2018, TOR’s losses were above GHC300 million annually, recording the highest in 2014 at GHC927 million and the least in 2018 at GHC382 million.”
Cumulatively, the total loss over the five years amounts to GHC2.707 billion against total revenues of GHC1.263 billion. Tema Oil Refinery (TOR) made a loss of GHC1.675 billion, according to the 2022 income statement of the company. This is the same company that some so-called experts are writing in the media that the company can make a US$ 700 million profit a year.
Currently, TOR owes staff pensions (SSNIT, TIER 1 and 2), Ghana Revenue Authority, Ghana Water, Electricity Company of Ghana, and many other companies. The total TOR debt to date is US$540 million and growing by the day. The refinery has not refined any crude oil since March 2021, meanwhile, the workers are paid every month.
The refinery
Founded on 12 December 1960, as the Ghanaian Italian Petroleum (GHAIP) Company, Tema Oil Refinery (TOR) stands as Ghana’s premier crude oil processing facility. Originally Italian-owned, the government became the sole shareholder in April 1977, prompting a name change to TOR in 1991.
Today, TOR is authorized to refine and sell petroleum products, playing a vital role in Ghana’s energy sector. The vision of TOR is to provide quality energy products and services to power Ghana’s economic growth in an environmentally sustainable manner as well as to be a preeminent refinery, a pride for Ghanaians.
At the heart of Tema Oil Refinery (TOR) lies a strong set of fundamental values that serve as the foundation for TOR’s operational culture. The Refinery’s commitment is expressed through these principles, which also influence workers’ daily decisions and actions.
