GNPC Rescues TOR

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Within days after the Tema Oil Refinery (TOR) was shut down as a result of a supplier’s inability to supply, the Ghana National Petroleum Corporation (GNPC), has delivered to the nation’s only refinery, one Million barrels of crude oil, on schedule. The product, which was delivered on Monday, would see to the re-opening of the processing plant, which was shut down because a supplier could not deliver on schedule between April 8th and 10th.

The workers of the refinery, following the shut-down of the processing plant, cited certain individuals and government officials as being responsible for their predicament. The TOR management has since apologised for the conduct of the workers, explaining the reason for the shut down and clarifying further that it was mainly because the vessel bringing the Crude Oil did not meet the required standards of the TOR Offshore Mooring facility.

GNPC was until 1996, the sole importer of crude oil into the country, for TOR to refine. A government policy review, however took that function away from GNPC. The Tema Oil Refinery has since assuming responsibility of ownership of crude imports, been reeling under huge debts, arising mainly from its crude oil import activities.

TOR was recently given some respite by a GH¢445 million Government bail-out to settle part of the debt it owed the Ghana Commercial Bank (GCB). The Ministry of Finance and Economic Planning announced the package in Accra on Wednesday March 24, 2010 at a media briefing addressed by the Minister, Dr. Kwabena Duffuor. He told newsmen that the settlement was a comprehensive approach by government towards redeeming TOR’s indebtedness to GCB.

The huge indebtedness notwithstanding, the Ghana Commercial Bank, for a long time, continued to be the only bank raising letters of credit for TOR to purchase crude on the world market. This over the period overexposed the bank to TOR, estimated at more than GH¢800 Million.

The debt accumulated as a result of several years of under-recovery of petroleum prices, and has been a huge worry to government, Dr Duffour had said. The Minister also disclosed that the package would further increase government’s equity in TOR.

With this payment, however, TOR still owes GCB an estimated GH¢403 million. Dr. Duffuor said with the first hurdle cleared, TOR can operate efficiently to raise additional funds to pay off the remainder of its debt and the refinery should also be able to secure Letters of Credit within a week from that date, to import crude oil.