The country’s only oil refinery, the Tema Oil Refinery (TOR) Limited, has submitted a proposal to government seeking $56million to fix technical problems at the plant.
“This is part of our long-term strategy to ensure that that we improve our profitability and also ensure sustainability,” Managing Director of TOR, Mr. Ato Ampiah, told the Business and Financial Times in an interview.
“The Ministries of Finance and Economic Planning and Energy have welcomed the proposal, and we’re hopeful the money will be approved soon,” he said.
According to Mr. Ampiah, TOR is a profitable business and can be operated profitably; adding that “it is also a strategic national asset we need to jealously guard and make sure it is operated profitably.”
He told B&FT that a comprehensive operational audit into operations of the refinery to assess its viability is underway.
The audit will examine the technical, financial and legal areas of the operations, after which a business plan will be drawn.
“It is important that we look at the strengths and weaknesses of the company, but most importantly, the policy direction of TOR,” said Mr. Ampiah.
The plant, which has a processing capacity of 45,000 barrels per day, has been hit by repeated shortages of available crude since 2008, when its main lender Ghana Commercial Bank cut off support due to unpaid debts. The Mills administration repaid the debt earlier this year.
The repeated outages at the plant have led to shortages of domestic supplies of fuel, particularly gas for cooking.
The oil discovery in Ghana has also heightened motivation to strategically position TOR to meet the processing needs of the emerging oil industry.
But the challenge for TOR is how it can be brought back to profitability, while reducing the frequency with which it shuts down and starts up.
Government will have to stop interfering in the day-to-day management of TOR to enable the plant operate and achieve its goals and objectives, industry insiders say.
“There is a management team that has been set up, and the government needs to respect the decisions they make, believing that the decisions made will have a positive impact on the company,” two stock analysts based in Accra with knowledge of the oil industry told B&FT — but asked not to be named.
“Staff of the company must also be made to understand and take ownership of the vision and mission of company.”
According to the analysts, “We need to depoliticise the operations of TOR for it to be independent and serve the nation.”
They suggested that government could float shares of TOR on the Ghana Stock Exchange so that there will be private investment equity in the business.
“This will allow TOR to operate independently and government will not have a monopoly over it.”
TOR acquires new gas compressor
A delegation of engineers from the equipment and instrumentation departments of TOR has embarked on a trip to South Korea to conduct a Factory Acceptance Test (FAT) on a newly acquired off-gas compressor.
The compressor, being supplied by Kwang Shin Machine Industry Company of South Korea and installed by Glotec Ghana Limited, a local contractor, is aimed at compressing off-gases from the distillation process for use as fuel in the refinery’s furnaces and boilers.
The installation of the compressor, according to Mr. Ampiah, will not only improve the efficiency of the plant but also help the refinery reduce operational cost. “Hopefully, by the 4th of this month the compressor will depart for Ghana.”
Source: B&FT