We can’t allow TOR to collapse, we’re surprised about government’s quietness – Institute for Energy Policies and Research

The Institute for Energy Policies and Research (INSTEPR) in consultation with other civil society organizations and industry experts will organise a forum to engage the government to find a lasting solution to the Tema Oil Refinery (TOR) problem.

According to the institute, it cannot allow a national asset like TOR to collapse and turned into a tank farm, as proposed by others in the past.

It expressed surprise in a statement that the government as a majority shareholder of the refinery has been quiet on any plans to get the refinery working to cushion the suffering of Ghanaians.

It explained that “the cost to revamp TOR and provide capital for its operations is estimated at $500 million. We all know Ministry of Finance does not have this money especially under the watchful eyes of the IMF”.

The institute in the past, had outlined the following to solve the problems at Tema Oil Refinery. They included fixing the CDU from the 23,000 barrels per day to 45,000 barrels per day, solving the RFCC problem, installing hydrotreating catalysts and technologies for all crude oil fractions, enabling the refinery to meet 50 ppm or lower specifications and constructing a gas pipeline (less than 1 kilometer) to power the refinery.

The question on the minds of most Ghanaians is, why is Tema Oil Refinery not working? In recent months there have been over 150% increase in prices of Petroleum products. This has brought immense hardship on the average Ghanaian through the increase in the prices of goods and transport”, the statement mentioned.

The last time TOR refined crude oil was in April 2021, just before the appointment of the Interim Management Committee (IMC) on June 15, 2021. The Energy Minister tasked the IMC among other things to receive and assess viable partnerships for TOR.

The institute pointed out that there was no procurement or refining of crude during the three-member IMC stay at TOR for 9 months.

INSTEPR in several publications questioned the work of the IMC and felt they did not perform according to their scope of work.

A new Managing Director, Mr. Jerry K. Hinson and board of directors were appointed on March 2, 2022. The refinery, eight months after the new board, the institute said has still not refined a single parcel of crude oil, a situation which is becoming very worrying to industry experts.

It mentioned that the premier Oil Refinery when working reduces the importation of petroleum products including LPG (cooking gas) and provides job security to the hundreds of technical staff. “TOR until April 2021, had a tolling business model which was started by Isaac Osei with Woodfields Energy Resources. This business sustained the refinery with cash flow until the contract was frustrated and not renewed without any substitute arrangement”, it stated.

“Today, the problems at the refinery are as it was five years after the explosion that reduced its refining capacity from 45,000 barrels to 23,000 barrels per day”.