Kufuor Unhappy About Tor Refineries's Indebtedness

THE HUGE frame of President John Agyekum Kufuor has literally 'dropped' on the Tema Oil Refinery (TOR) whose indebtedness he says is leading to the collapse of some of Ghana's commercial banks.

President Kufuor, known in political circles as the gentle-giant, said this at Tema when he commissioned a $2390 million Residual Fluid Catalytic Cracker (RFCC) at the TOR.

He was emphatic about activities at the nation's only refinery, mincing no words at 'prosecuting' some senior staff of the TOR.

He said the refinery cannot prosper when there are corrupt practices, especially at the procurement level, and some senior staff are also private contractors to the company leading to conflict of interest situations.

According to the president, the ?3.4 trillion debt hanging over TOR has become the biggest source of dislocation of the economy and is virtually collapsing "some of our commercial banks" which have been sucked into managing the domestic foreign accounts of TOR.

The TOR debt, he said, undermines all the best efforts and has now become like the proverbial black hole into which all money sinks without trace, making it impossible to pass on to the customer the benefits to the fall in the world price of crude oil.

A large percentage of the nation's foreign exchange proceeds go into the importation of petroleum. Last year alone, the President said, about $500 million of the foreign currency earnings were used to procure crude oil and other petroleum products.

On problems that have bedeviled the management of the refinery, President Kufuor urged the players to seize this opportunity to try and resolve the company's financial problems once and for all, for he said, it is time for TOR to break away from cycle of crisis management and become a modern, efficient and profitable company.

A member and chairman of the TOR Interim Management Committee (IMC), Dr. John Robertson spelt out the prospects of the new RFCC, which he said, is the first of its kind in the sub-region.

According to him, the Tema Oil Refinery, formerly called Ghana-Italian Petroleum Company (GHAIP) was rated to produce 28,000 barrels per stream day (BPSD) but the capacity was increased to 45,000 BPSD after being revamped in 1998 at a cost of $65 million.

This was under phase one of the refinery expansion programme. Phase 2 which is the installation of the RFCC is to enable TOR convert the low cost residue (fuel oil) into additional quantity of high value Liquified Petroleum Gas (LPG) and gasoline sufficient to meet domestic demand and leave a surplus for export.

Construction work of the project, he said, began in May 2000 and was completed on schedule in December last year; the commissioning had to delay because of certain developments.

Even though one new boiler of 60 ton/hour capacity and a steam turbine generator of 5.5 mw capacity were installed to back the RFCC project, experience since last April has brought to the fore, the inadequacies of TOR's utility supply system and capability, namely, steam, electric power, compressed air and process cooling water systems. Most of the utilities were installed in 1963 and have become obsolete.

As a matter of urgency, TOR is requesting improvement programmes which include the installation of two new steam boilers with total capacity of 120MT/hour to replace three old boilers of total capacity of 60mt./h which date back to 1963.