Ghana's oil refinery back in action

After months of inactivity, Ghana's state oil refiner, Tema Oil Refinery (TOR), has bounced back, the company said here on Thursday.

TOR started refining crude oil late December 2014 after it received 800,000 barrels of crude oil from Sahara Oil, a Nigerian petroleum company.

Aba Lokko, Corporate and Public Affairs Manager for TOR, told Xinhua over the telephone that the comeback was made possible through a financial agreement signed with Access Bank.

TOR's last refinery was in August 2014 but due to financial and logistical challenges the state oil refiner could not procure crude for its core business.

"Due to financial challenges, we could not raise Letters of Credit from financial institutions to import crude," Lokko explained.

She said the company also had to upgrade some of its machines to bring them to optimal performance while automating its operations to reduce the manual interventions.

"We had to postpone this turnaround upgrading and equipment replacement due to the same financial challenges," she added.

The state oil refiner has been saddled with debt over a decade, forcing successive governments to slap a TOR Debt Recovery Levy on prices of petroleum products.

In the 2015 budget, the government re-introduced a 17.5 percent excise duty and the newly added ad-valorem to fuel cost.

Bulk Distribution Companies supplied imported refined products to the market in the absence of TOR products on the market.

"The partnership with Access Bank has just started. They would do further business with us as long as they are assured that we would repay their money. Then the needed trust would have been built for further cooperation," Lokko said.

She said the refiner was also in talks with some other international financial institutions to raise the needed capital for the company so it could sustain its operations.

The company has also, under the auspices of the government, been holding talks with Petro Saudi for ways of boosting cooperation in the petroleum business.

The official said the negotiations had been going on for some time and was hopeful that the two parties would be able to start a joint-venture initiative.

"The negotiation is to result in a joint-venture between TOR and Petro Saudi in which Petro Saudi would facilitate and ensure that TOR receives supply of crude oil on sustainable basis," Lokko told Xinhua.

The company was first named Ghanaian Italian Petroleum (GHAIP) Company and incorporated as a private limited liability company under the Companies Ordinance on Dec. 12,1960, and owned 100 percent by Italy's ENI Group.

After buying out all of ENI's shares from the company in 1977, the government of Ghana proceeded to change the name to Tema Oil Refinery (TOR) in 1990.

Ghana started commercial production of petroleum from its Jubilee field in December 2010, with expectations that the state refiner could process some of the products for export.