Speakers at the Ghana International Petroleum Conference (GhiPcon) have called for the Tema Oil Refinery (TOR) to be privatised, if the country wants to derive the right benefits from the facility.
They said the corruption associated with the facility, as well as its mismanagement, had accounted for the bottlenecks confronting it.
The speakers included a technical consultant at Dangote Industries Limited, Mr Babajide A. Soyode, a former Chief Executive Officer (CEO) of Ghana National Petroleum Corporation (GNPC), Mr Alex Mould, the head of Marketing and Origination at BP Oil International Limited, Mr John Goodridge.
They were speaking on the prospects of refining crude oil in Ghana as the government seeks to make the country a viable hub for petroleum products in Africa.
Mr Soyode made a strong case that the government had no business managing TOR, particularly so, when it was clear that it had failed to make the maximum use of the facility over the years.
"TOR is about 65 years but still a baby that is struggling to walk. There are about 750 people working there yet under normal circumstances, it does not require more than 50 people.
“The time has come for the government to pack and leave TOR for the private sector to take charge. The private sector can better raise funds and manage the refinery prudently than what the situation is now," he said.
Mr Soyode added that the subsidy regime on petroleum products by successive governments was needless since such an intervention was a drain on other social sectors of the economy.
"The taxpayer's money that is used for this subsidy could be directed to education, health and critical areas of the economy,” he said.
For his part, Mr Mould said it was time for the government to make a complete audit of TOR to ascertain its indebtedness and commence processes to revive it.
“By estimation, about $300 million will be required to bring the refinery up to international standards so that it will operate at optimum level and be beneficial to the country.
“The government must decide whether to bring in a strategic investor or sell the facility totally to the private sector,” he said.
Mr Mould said if the government decides to sell some of its shares in TOR to other entities or invite a strategic partner to invest in the entity, it would mean that the management and control of TOR would change.
On the other hand, he noted that if the government decided to fund the company, it would come at a great cost since revenue generated for other purposes would have to be expended on it.
“As of now, borrowing money to fund TOR will not be a prudent thing to do because the country’s debt stock is already high,” he cautioned.
Mr Goodridge, for his part, also said the idea of making Ghana a petroleum hub by building refineries was good but stressed that the move called for good leadership and strong financial institutions for sustainability.
He added that good and robust refinery infrastructure would help to add value to crude oil and create more secondary industries and job opportunities in Ghana and other African countries.
However, he pointed out that the move towards establishing refineries and making Ghana a petroleum hub required a multiplicity of structures to materialise.
"Refineries do not exist in isolation, there should be a good road network, robust private sector, the right regulatory regimes. There should be zero tolerance for corruption as we embark on this journey to make Ghana a petroleum hub," he stressed.
A deputy Minister of Finance, Mr Charles Adu Boahen, said the situation at TOR was dire, adding “nobody will buy the facility if it is listed on the stock exchange because it will not be profitable to do so.”
He said investors would be courted to invest in the facility to help develop it in line with the petroleum hub agenda being pursued by the government.
Touching on funding mechanisms for the petroleum hub initiative, he said the government had good policies in place to motivate private sector participation and attract investors.
Among other things, Mr Boahen said financial policies such as the minimum capital requirement for banks and the Ghana Infrastructure Funds indicated the government's preparedness to support private investors.