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Mr Awuah Darko speaking at the review meeting
Mr Awuah Darko speaking at the review meeting

BOST’s success due to effective partnership

The strategic partnership between the Bulk Oil Storage and Transportation Company (BOST) and its partners has been a key driver of the company’s profitability over the past two years, the Chief Executive Officer (CEO) of BOST, Mr Kwame Awuah Darko, has said.

The company, which posted a profit of GH¢109 million in 2015 and GH¢93.6 million in 2016, is attributing its success to the partnership between the Ghana Oil Company (GOIL) and its subsidiary GO Energy, as well as eight other international oil trading companies.

According to Mr Awuah Darko, BOST engaged international partners such as Gunvor, British Petroleum, AOT, Letasco, BB Energy, Trafigura and Moccah to supply the company with both finished products and crude oil on an open account basis.

The partnership, he said, made it easier for trading partners to finance the company’s operations in excess of $9 million.

“The partnership has not been backed by any bank guarantee or government support but on the credibility that BOST has established among these companies and their partners,” Mr Awuah Darko said.

He was speaking at an end-of-year review meeting and a media interaction programme held in Accra last Wednesday.

Debt restructuring

He said debt restructuring became a key component of the company’s turnaround strategy, since it became necessary for management to ascertain the exact amount of debt stock it actually was obligated to.

A turnaround strategic programme which was implemented by BOST from October 2013 to 2014 led to the resuscitation of the company’s operations.

The operational challenges at the company’s terminals, which included bad inventory management of petroleum products, coupled with bribery allegations of staff members in the past, he said, were a major influencer in the outsourcing of its terminal management responsibilities to TSL Logistics, a Nigerian firm.

The outsourcing, he said, paved the way for the resumption of work across all six depots of the company in Akosombo, Kumasi, Buipe and Bolgatanga.

“Today, we have a vibrant terminal business, a fuel trading business which has distributed over $1.4 billion of petroleum products in Ghana and other West African countries and has made a combined profit in excess of over $50 million,” Mr Awuah Darko stated.

SPRP Project

Similarly, he said the Strategic Petroleum Reserve Programme (SPRP) which was initiated in September 2014, apart from guaranteeing Ghana’s fuel security, was also supporting Mali, Burkina Faso, Niger and Benin and had commenced export activities to Liberia.

“This is the effect of the vision espoused for Ghana to be the energy hub of West Africa,” Mr Awuah Darko stated.

He also disclosed that an inventory validation audit conducted in 2014 showed that the Bulk Distribution Companies (BDCs) owed BOST in excess of $18 million.

“BOST has subsequently initiated processes to reclaim the money’s owed it by the BDCs,” Mr Awuah Darko hinted.

Deregulation

He emphasised that the deregulated petroleum pricing regime had not only kept prices flat, but also generated healthy competition leading to the vibrant and competitive petroleum sector.

“This efficiency in pricing has saved the Ghanaian consumer an average of GH¢1.15 per litre from June 2015 to June 2016,” he added.

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