Information reaching the New Statesman indicates
that Ghana’s only oil refinery, The Tema Oil Refinery (TOR), has virtually
collapsed under the tenure of the ruling National Democratic Congress
administration.Since NDC government took over the reins of
government in 2009, TOR has been virtually dormant except in 2010 when the
company operated continuously on the back of regular crude oil supplied by the
Ghana National Petroleum Company under a 1-year ‘processing’ or
‘tolling’agreement. However, since then, TOR’s plants have been operating at
less than 30% of capacity in 2009, 2011 and 2012.
TOR’s virtual collapse has resulted in continuous
year after year financial losses, massive brain drain of technical staff coupled
with low morale and motivation among current TOR staff and
management.
The New Statesman can confirm that the NDC
government has pursued policies designed to ‘kill’ TOR – by promoting over 12
new private fuel importers, while denying tor the working capital it
needs.
At the same time, the NDC government has refused
outright to supply jubilee crude oil to TOR, with the baseless excuse that
jubilee crude is not suitable for TOR. Meanwhile TOR’s assay tests have
confirmed that TOR can easily handle and refine jubilee
crude.
In this edition, the New Statesman will assess
TOR’s current situation and the NDC’s failed promises regarding the revival of
TOR.
TOR’s current
situation
TOR is still buried under massive debt to the tune
of some US$350 million and is unable to operate. The company owes this amount to
twenty (20) creditors including: Banks (Ghana Commercial Bank and Barclays); Oil
suppliers (Vitol, Glencore, Sahara, VRA, GNPC, NNPC); Utility companies
(Electricity Company of Ghana & Ghana Water Company Limited); Contractors
(GLOTEC, TSAKOS); Tax agencies (SSNIT and IRS); and other companies (Insurance
and TOR provident fund)
Expensive spare parts ordered and delivered to the
Tema ports since 2009 have not been cleared and have been left to the mercy of
the weather.
Technical personnel with years of experience, who
are critical to the operations of the refinery, have also left for Qatar,
Cameroon, Equitorial Guinea, Dubai and Abu Dhabi. The New Statesman can confirm
that over 20 key engineers and technicians left TOR since 2011. It is being
reported that TOR’s board and management have now resorted to offering“bribes”
to some key staff not to decamp to the Middle East
refineries.
As though this was not enough, the
government-to-government (g-to-g) crude oil agreement whereby the Nigerian
National Petroleum Corporation (NNPC) supplies crude oil to TOR under
concessionary terms has been in limbo since beginning 2011, as is the agreement
with Equitorial guinea.
TOR has not issued audited accounts since 2008.
Without proper financial accounts and a clear turnaround plan, TOR’s bankers are
unable to provide working capital for tor’s sustained
operations.
These problems have reduced TOR to a fuel storage
depot where private importers store their fuel in return for a modest fee. These
storage fees have become TOR’s only stable source of cash. As a result TOR is
unable to meet salaries and other statutory payments, including payments to
SSNIT, IRS and staff provident funds.
NDC government’s failed promises to
TOR
The Mills/Mahama/Amissah Arthur government have not
given adequate financial support to TOR. In 2010, the Ministry of Finance and
Economic Planning paid a total of GH¢1.4 billion to Ghana Commercial Bank on
TOR’s behalf. This was only a part of TOR’s debt, leaving a balance of about
GH¢400 million payable to other creditors.
Beyond the payments to Ghana Commercial Bank, the
NDC government has only given promises to TOR, but has not provided any
additional funds.
In August 2011, then vice President John Mahama
announced that the government of Ghana would provide $56 million to TOR
immediately for retooling to improve its efficiency and
performance.
In addition, the Minister of Finance, Dr. Kwabena
Duffour, stated at the same meeting, that the TOR debt recovery levy had
accumulated GH¢270 million as of August, 2011 which would be used as collateral
to raise $200 million working capital for TOR.
As at today, 9th November 2012, the NDC government
has failed to keep any of the above promises. Instead of taking bold and speedy
actions to save tor, the NDC government continues to ‘dilly dally’, by launching
endless consulting studies to find out how to save TOR.
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