The Ministry of Energy has clarified that no agreement has been reached between Tema Oil Refinery (TOR) and potential partners, Torentco.
While negotiations are underway, the Ministry emphasizes that nothing has been finalized. In a press statement issued on Sunday, June 25, the Ministry’s spokesperson, Kofi Abrefa Afena, urged critics of the sector minister, Dr. Matthew Opoku Prempeh, to verify their allegations before making them public.
The Ministry affirms the Energy Minister’s unwavering commitment to revitalizing TOR in alignment with the President’s vision.
Mr. Abrefa Afena expressed the government’s determination to find strategic partners for the refinery.
This endeavor involves key state actors such as the State Interests and Governance Authority (SIGA) and the Attorney General’s Department.
TOR, a vital entity in Ghana’s energy sector, has encountered significant challenges in recent years, including operational inefficiencies, financial constraints, and the need for infrastructure upgrades.
Recognizing the urgency to address these issues, TOR’s management has undertaken a comprehensive evaluation of potential solutions.
After careful consideration and rigorous analysis, the management team has determined that the Torentco deal offers the most promising path forward.
However, concerns have been raised by various Civil Society Organizations (CSOs), including the Africa Center for Energy Policy (ACEP), regarding the lease agreement negotiations between Torentco and TOR.
ACEP highlights that Torentco, a Ghanaian company established in January 2023, lacks a track record in the petroleum industry and does not possess the necessary capacity to effectively take over TOR.
ACEP’s Executive Director, Ben Boakye, argues that holding Torentco accountable would be challenging if they fail to deliver due to their lack of experience in petroleum businesses.
TOR, in an official response, states that the proposed deal entails a strategic partnership between TOR and Torentco with the aim of modernizing the refinery’s operations, enhancing efficiency, and improving its competitive position.
The collaboration will involve substantial investments in infrastructure, technology upgrades, and capacity expansion.
Additionally, TOR’s management emphasizes that the Torentco deal will secure a reliable supply of crude oil, a critical input for the refinery’s operations.
TOR further asserts that the Torentco deal will bring much-needed financial stability by leveraging Torentco’s financial resources and access to capital markets.
This funding will support infrastructure upgrades, maintenance, working capital, and ensure uninterrupted operations and improved financial performance.
Moreover, the collaboration aims to retain talented engineers within the company.
The management of TOR believes that the Torentco deal represents a transformative opportunity for the refinery and Ghana’s energy sector as a whole.
They are confident that this strategic partnership will reposition TOR as a vital contributor to the country’s economic growth, job creation, and energy self-sufficiency.
The proposed transaction aims to achieve sustained positive net cash flow for TOR, demonstrate efficient processing of crude oil at the refinery, and achieve industry-accepted yields.