The Tema Oil Refinery (TOR) is to commission a new furnace by the fourth quarter of this year to increase the Refinery’s processing capacity.
Contractors are currently working on the site to ensure the completion of the furnace and get it ready for commissioning.
A statement made available to the Ghana News Agency on Wednesday said the refinery’s processing capacity was reduced from 45,000 barrels per stream day (BPSD) to about 25,000 BPSD, following the implosion of one of TOR’s two crude heaters in January 2017.
It said the reduced processing capacity led to a reduction in revenues.
“Even though the loss of the furnace in 2017 had a fundamental impact on TOR’s ability to pay its fixed costs, arrears and other payment obligations, it was incorrect to say the refinery was on the verge of collapse as being circulated in the media,” the statement said.
It noted that the delay in the completion of the new furnace project was due to a lack of funding to complete the installation and commissioning by the contractor’s engineers based in Italy.
The Management added, however, that with the support of the Ministry of Energy it was able to source funds in February 2021 through the Ministry of Finance to complete the revenue-generating project.
Touching on tolling, management stated that negotiations with a potential new tolling partner were far advanced and expected to be concluded by June 2021.
“That notwithstanding, other arrangements are being made with other partners to deliver Crude for processing.”
The refinery, it said was currently undergoing mini maintenance in preparation for the next supply of crude oil.
The maintenance exercise, it noted, was expected to be completed in June 2021.
Touching on other moves to improve the gains of the Refinery, it indicated that through the support of the sector ministry, the company was granted a licence by the National Petroleum Authority (NPA) for the import of petroleum products for blending at the Refinery and also to sell to the local market to support cash flows.
This, they noted, was in line with TOR’s mandate as set out in the Companies regulation which authorizes it to carry on the business of refiners, importers, stores, suppliers, buyers and sellers of petroleum products, in all its branches among others.
Deliveries of LPG, they indicated commenced in April 2021 and “TOR recorded additional margins directly related to LPG sales,” noting that the company was concluding arrangement to commence import of other petroleum products to support its cash flows and help meet its payment obligations.
“TOR management achieved over US$1million insurance premium reduction for 2021. This was due to prudent management and improvement in the refinery’s risk quality in 2020,” the statement explained.
Efforts by Management led to the payment of TOR’s outstanding GHS1 Billion debt that accrued between 2009 and 2016.
The payment was made by the current government as part of support to TOR.
A further US$167m of the debt carried over from 2009 to 2016 has also been paid by the Government.
It said management had also set in motion a mechanism to settle outstanding debt and ensure that the necessary capital injection required for the effective and reliable operation of the refinery was made.
The Management revealed that a Business and Revitalization Plan developed to form part of required inputs for the application for recapitalization of TOR was in February 2021 endorsed by the State Interest and Governance Authority (SIGA) and forwarded to the Ministry of Finance for consideration.
“The Management of TOR continues with its efforts to clear all other debts by agreeing to payment plans for all legacy statutory debts such as GRA, SSNIT and Tier 2. However, for the year 2021, TOR endeavours to remain current on all statutory debts when they become due.”
“TOR management is also in discussion with Ghana Water Company Limited and other creditors to agree on payment plans for the settlement of legacy debts.
“Arrangements have also been made for payment of outstanding terminal benefits due to retired and resigned staff. Arrangements are also being made for repayment of provident fund arrears,” management said.