Tuesday, April 15, 2014

Vested interests drown TOR-Amin Adam

The Tema Oil Refinery (TOR) is still struggling to raise enough money to renew their plant and buy crude oil because of vested interests.
In view of this they are unable to operate efficiently.
Mohammed Amin Adam, the Executive Director of Africa Centre for Energy Policy (ACEP) in an exclusive interview with Spy Ghana at an IFEJ, GIZ and SECO training of journalists on transparency initiatives at Elmina over the weekend revealed that TORs’ problems can be blamed on vested interests who import finished petroleum products into the country.
“The delay in releasing money to TOR is not by accident. Downstream petroleum is a mafia, therefore capitalization is a matter of cause because it is the only refinery we have in Ghana and it will help prevent the mafias from making money at the expense of government,” he added.
According to him, many people have talked about building new refineries but looking at economics of refineries, new refineries are no longer fashionable because the profitability is not that much. “They only get their refinery margins. And it is from this that they pay salaries and do their new investments.”
Rather than signing Memorandum of Understanding (MoU) with other private companies to come and do refinery, Amin Adam argues that we should attract the private capital into TOR and ensure that TOR operates at high level of efficiency.
Adam said it can even operate as tolling refinery and refine the products of Nigeria, Cote D’Ivoire among others, he argues.
Subsidizing TOR is not efficient. TOR refinery margin is higher than imported products. As of now we are paying TOR for nothing. The money for subsidy is not there. And the debt keep piling that is why you and I have been asked to pay TOR levy, according to Adam.
TOR requested for $60 million from government but was given only $30 million.
TOR’s production capacity is 45,000 barrels per day but they are doing about 28,000 per day now. Ghana consumes about 60,000 barrels a day. There are vested interested who do not want to see TOR in operation because they make money from direct lifting of finished products into Ghana.
Adam said, “TOR has not been managed well over the past years because we apply politics in running TOR. We appoint politicians to run TOR instead of technocrats. The board members are not selected because of their expertise.
I want us to give to a business approach to organisations like TOR. What we can do is to capitalise them to a level and expect results. And capitalisation should not be forever. It should be such that they can later run in their own.
TOR, Bulk Oil Storage and Transportation (BOST) and Ghana National Petroleum Cooperation (GNPC) should not depend on the budget any more. The only way we can do that is to capitalize them and give them a deadline to operate on their own. We must also appoint competent people who can deliver and fire them if they don’t perform.
I have heard the president saying that they are going into a joint venture with the Saudis. It is a good move but we want to see transparency in the process so that we don’t see politicians fronting for this company.”
TOR Limited is authorized by its regulators to process crude oil and market petroleum products. The refinery is situated in Tema about 24 kilometers east of the capital, Accra.
It was originally named the Ghanaian Italian Petroleum (GHAIP) Company and incorporated as a Private Limited Liability Company under the Companies Ordinance (Cap 193) on December 12, 1960.
It was 100% owned by the ENI Group (Ente Nationalie Indrocarburi) of Italy. The Government of Ghana bought all the shares of GHAIP in April 1977 and became sole shareholder. In 1990 the name was changed to the Tema Oil Refinery (TOR).
By Pascal Kelvin Kudiabor

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