The time has come for the government to allow private sector investments into the Tema Oil Refinery (TOR) to help retool and make the refinery more efficient to be able to process locally produced crude oil, outgoing Group Chief Executive Officer of GOIL Limited, Mr Patrick A. K. Akorli, has said.
Resourcing TOR to refine Ghana crude for domestic consumption would help return the refinery to its glorious old days, when it was a hub of engineers and an employer of choice, providing decent jobs for Ghanaians, Mr Akorli told the Daily Graphic on May 30.
While backing growing calls for TOR to be given a portion of Ghana’s share of the crude oil to process, the GOIL MD, who has more than two decades’ experience in the downstream petroleum sector, noted that the refinery required new investments to be able to realise that objective.
“The whole thing is that the refinery must be efficient and it can only be efficient if it is retooled but I do not think that the government will divert money that is meant for social intervention into recapitalising TOR.
“So, maybe it is time for private people to see that there is something in TOR and start working around it,” he said.
A private partnership would place the refinery in a more efficient and healthier state, capable of delivering value and beating competition in the refinery business where profit margins are relatively small, he explained.
TEN crude oil
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Mr Akorli was sharing his views with the paper on growing calls by industry heavyweights that TOR should be revamped and allowed to process locally produced crude oil.
At the recently held Offshore Technology Conference at Houston, Texas in the United States of America, the Chief Executive Officer of the Chamber of Bulk Oil Distributors (CBOD), Mr Senyo Hosi, told stakeholders in the petroleum sector that the government must attract private capital for TOR and use that to revamp the refinery and make it a trigger point of its petroleum hub agenda.
At the same event, the MD of TOR, Mr Isaac Osei, also made a strong case for TOR to be revamped and used to achieve President Nana Addo Dankwa Akufo-Addo’s vision of building a Ghana beyond aid.
“Ghana has discovered crude oil in commercial quantities and this should translate into the state refinery being provided a portion of such crude as its feedstock.
“The people of Ghana and the government as a whole would benefit a great deal and the government's agenda of ‘Ghana beyond Aid’ will be given additional boost if the right structures are put in place and TOR is made to refine local crude oil from Tweneboa-Nyera-Ntoume (TEN), Jubilee and/or Sankofa-Gye Nyame fields as feed stock,” Mr Osei said.
In 2018, TOR refined crude oil from the TEN Field for a third party and the MD said the yields at the time were good – boosting his confidence that the refinery would deliver optimal results when supported to process locally produced crude.
Commenting on Mr Osei’s position, GOIL’s MD said it was appropriate and he supported it.
“I support the idea that if you have oil; we are exploring our own oil and we have a refinery, then it needs to be vertically integrated (ensuring that the supply chain of the petroleum business is dominated by nationals).
“But it needs a bit of investments to retool and refurbish the place so that we know that if you are putting in 100 barrels of crude oil and the yield is supposed to be so and so, then you get it.
“That is where the problem is and I am hopeful that it will be resolved,” he said.
Mr Akorli recalled that “when TOR was TOR, there were a lot of chemical, petrochemical, civil and all kinds of engineers were there and some of them are now being exported to the Arab area.
“So, personally as a Ghanaian, I would want a vibrant TOR but maybe it needs some kind of refurbishment and who does the investment? “It’s the government”.
“But anything that is government is taken as ‘it’s for us’ and so I will prefer private partnership so that good structures are put in place,” he said.
He explained that the tight profit margins from the refinery business required that TOR was supported to be efficient to be able to compete with other refineries worldwide.