The Institute for Energy Policies and Research (INSTEPR) has revealed that the cost to revamp the Tema Oil Refinery (TOR) and provide capital for its operation is estimated at $500 million.
According to the Institute, the government as majority shareholder of the refinery has been quiet on any plans to get the refinery working to cushion the suffering of Ghanaians. It indicated that the Institute in consultation with other civil society organization and industry experts will organize a forum to engage government to find a lasting solution to the TOR problem.
INSTEPR noted that government cannot allow a national asset like the refinery to collapse and turned into a tank farm, as proposed by others in the past. It expressed surprise that government as a majority shareholder of the refinery has been quiet on plans to resuscitate the refinery to cushion the suffering of Ghanaians.
“The cost to revamp TOR and provide capital for its operations is estimated at $500 million. We all know Ministry of Finance does not have this money especially under the watchful eyes of the IMF”.
Institute for Energy Policies and Research
Contained in a statement, the Institute stated that the question on the minds of most Ghanaians is why the Tema Oil Refinery is not working. It explained that in recent months, there has been over 150% increase in prices of Petroleum products and this has brought immense hardship on the average Ghanaian through the increase in the prices of goods and transport.
Interim Management Committee partnership for TOR
The last time, INSTEPR noted, that the Refinery refined crude Oil was in April 2021, just before the appointment of the Interim Management Committee (IMC) on 15th June, 2021. It asserted that the Minister tasked the IMC, among other things, to receive and assess viable partnerships for TOR. The three-member IMC was at TOR for 9 months and during that period there were no procurement or refining of crude.
“INSTEPR in several publications questioned the work of the IMC and felt they did not perform according to their scope of work. A new Managing Director, Mr. Jerry K. Hinson and board of directors were appointed on 2nd March 2022. The refinery, 8 months after the new board, has still not refined a single parcel of crude oil, a situation which is becoming very worrying to industry experts.”
Institute for Energy Policies and Research
The premier Oil Refinery when working, the Institute highlighted, reduces the importation of petroleum products including LPG (Cooking Gas) and provides job security to the hundreds of technical staff. It revealed that TOR until April 2021, had a tolling business model which was started by Mr. Isaac Osei with Woodfields Energy Resources.
This business, INSTEPR opined, sustained the refinery with cashflow until the contract was frustrated and not renewed without any substitute arrangement.
Currently, the Institute intimated that the problems at the refinery are as it was 5 years after the explosion that reduced its refining capacity from 45,000 bpd to 23,000 bpd. INSTEPR in the past, indicated that it had outlined some measures to solve the problems at Tema Oil Refinery.
This, it noted, included the fixing of the CDU from the 23,000 bpsd to 45,000 bpsd, solving of the RFCC problem; installation of hydrotreating catalysts and technologies for all crude oil fractions and enabling the refinery to meet 50 ppm or lower specification.
Additionally, INSTEPR emphasized that it suggested government constructs a gas pipeline to power the refinery to stops the refinery from using expensive Crude oil for power and also put measures and security in place to stop the theft of products.
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