September 9, 2014

The Energy Ministry has said the Tema Oil Refinery (TOR) will not be sold under any circumstance.

Minority in parliament have previously alleged that government was planning to sell the refinery to a private entity to make it efficient.

Some economists and energy analysts have also argued for the refinery to be sold because it is creating more debts for government.

The sector minister, Emmanuel Armah Kofi Buah in his address to the press on Tuesday said: “Tema Oil Refinery is not for sale, not under my watch, not under the watch of his Excellency the President.”

The refinery has not been operating at full capacity over the years following its huge indebtedness and other operational inefficiencies.

Workers at the refinery in recent times have been demanding that the government should allow TOR refine crude from Ghana’s jubilee oil fields because the refinery is capable.

But a vote of no confidence was passed on this demand as the Ghana National Petroleum Corporation (GNPC) indicated that TOR in its currents state is not profitable.
Kofi Buah however says government is focused on restructuring TOR into a world class refinery, adding that the Ministry is working with TOR to address its fiscal challenges.

“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 explained.

Business plan discussions, he said, are earnestly ongoing while the commercial framework for the restructuring of the refinery is being finalized.

A meeting involving all stakeholders including the Attorney General and the Ministry of Finance which is scheduled for mid September is to take place to discuss the shareholder agreement and government support on consent agreement and other off-take agreements.

“Timelines for the negotiating and execution of documents including submission to cabinet and parliament is expected to take place in the last quarter of this year,” said the Minister.

Kofi Buah was certain that current ongoing discussions will be concluded “to really see a real injection of capital for TOR to be able to operate.”

He added that the management of TOR is aggressively negotiating with international and local financial institutions for funding.

The funds will then be used “to execute their [TOR] annual mandatory maintenance and we are also finding the supply of full stock of crude, pending the implementation of negotiations.”