Business News of Sunday, 24 February 2013
Source: Joy FM
Tema Oil Refinery (TOR) is set to resume operations from the first week of March.
This follows the completion of repair works on its refinery plant, which broke down in July last year due to some challenges with power supply.
The state refinery last month secured about half of a $67 million facility from government as part of its Plant Sustainability and Profit Enhancement programme. TOR is expected to start refining about 30,000 barrels of crude oil a day when it starts operations.
Managing Director, Ato Ampia explains to Joy Business measures being instituted to ensure that the refinery remains viable after the resumption.
According to him, they have fixed "boilers which were consuming a lot of fuel oil. Last year we consumed almost about US$60 million worth of fuel oil, we are going to use only about 10 percent.”
He added that TOR coming back will greatly improve supply of fuel on the market and help the country make some savings on crude oil imports.
TOR debt currently stands at $350 million after government managed to clear about almost a billion Ghana cedis over the past four years.
It currently requires about $650 million for their day-to-day operations going forward.
TOR is in negotiations with a bank for a trade finance facility which will ensure sustainable procurement of crude oil.
This facility is expected to be available by the end of March 2013. The refinery has not been capitalised since the Government of Ghana became sole shareholder in 1977.
In addition, financial institutions saw TOR as high risk and as such were not interested in transacting business or in establishing letters of credit with TOR due to the debt on its balance sheet.
The fluctuating cost of crude oil also put pressure on the profit margin of refineries worldwide, including TOR.