The Government of Ghana has started negotiations with PetroSaudi on behalf of the Tema Oil Refinery(TOR) to create a joint marketing wing with the idea to operate at total capacity and help with the procurement of crude oil.
Currently, various documents for the transaction including Project Agreements, Comprehensive Business Plsns, Government Consent and Support Agreement (GCSA),Shareholders Agreement and Off-taker Agreement among others are being reviewed and negotiated by the Attorney Generals Department,Ministry of Petroleum,TOR, Ministry of Finance and PetroSaudi.
According to the Petroleum Minister, Emmanuel Kofi Armah Buah, GCSA has always provided working capital to import oil. “Their aim is to partner PetroSaudi to import oil and transform TOR”.
He also dispelled rumours indicating that government intends to sell TOR. “TOR is not for sale. There is a marketing arm of TOR. Government does not intend to sell TOR,we are only working on a process to bring PetroSaudi on board. TOR has submitted the reviewed document to PetroSaudi for their consideration”
The negotiated GCSA and other related Agreements and documents will as required by law and practice be submitted to Cabinet for approval and thereafter submitted to Parliament for ratification.
The Government of Ghana (GoG) and TOR team plans to have GCSA and other related documents before Parliament by second quarter this year.
On whether TOR has the capacity to process crude oil, Mr Armah Buah explained that “just 2 months ago,TOR received 2,000 tonnes of crude which they have processed”.
Among the challenges facing TOR, the Minister highlighted are mainly technical and commercial and disclosed that they needed to complete a Plant Stabilization and Enhancement Project on the Crude Distillation Unit and Residual Fluid Catalytic Cracking Units to enable it procure crude and run efficiently.
Following the Ministry’s audit of TOR, a comprehensive action plan and capital expenditure budget for the Plant Stabilization and Profitability Enhancement Project which amounted to US$67.7million was submitted.
Subsequently, the Ministry facilitated the release of the first tranche of US$30million from the Ministry of Finance(MoF) to TOR to initiate implementation of the enhancement project. “Work on the first phase of the project has been substantially completed”
Earlier this year, MoF satisfactorily completed an internal audit to validate the disbursement of $30million by TOR. After the audit,MoPt and TOR have engaged the MoF to release the outstanding balance of $37.7million which has been approved and is awaiting disbursement.
Since the first phase of the rehabilitation was completed, a number of companies have expressed interest in the supply of crude to TOR. “The Ministry will continue to work with TOR to ensure the full completion of the enhancement project. This is the surest way of ensuring that TOR runs at optimal level to enable it secure consistent supply of crude oil” he concluded.