Management of the Tema Oil Refinery (TOR) has moved to reassure the public, particularly Civil Society Organisations (CSOs), that the TOR-Torentco partnership will bring significant benefits to Ghana’s oil industry.
In a statement addressing the concerns surrounding the collaboration, TOR management reaffirmed that the deal is in the country’s best interest.
The partnership between TOR, Ghana’s leading oil refinery, and Torentco, a reputable international energy company, has recently raised apprehension among Ghanaians.
Many individuals and CSOs have expressed fears regarding the potential implications for the country’s oil sector and national sovereignty.
Details of the Deal
In a stunning revelation, Vice President of IMANI Africa, Bright Simons, said the Public Procurement Authority is quietly leasing the Tema Oil Refinery to a shadowy group called Torentco Asset Management (TAM).
He explained that the refinery will be leased to TAM for 6 years where Torentco is allowed to refine up to 8 million barrels of oil a year by paying $1 million every year as annual rent.
He added that the group will also pay an additional rent amount of $1.067 million per month. Under the deal, Bright Simons said the group will pay $0.5 for each extra barrel if it refines more than 8 million barrels.
The CSOs had raised objections to the partnership, which they said had been carried out in obscurity and did not present the best opportunity or value to TOR.
They added that the partnership would render the refinery invalid at the end of its six year tenure.
However, TOR’s management is determined to alleviate these concerns and highlight the advantages that this partnership brings.
TOR’s management said in the statement that it is acutely aware of the concerns raised by Ghanaians, particularly the fear of relinquishing control over the oil industry to an international entity. To address this, TOR has emphasized that the partnership is founded on mutually beneficial terms, ensuring that Ghana’s interests remain safeguarded.
In a three-page report signed by the board and management, they explained that while they had wished to deal directly with a major multinational company, TOR’s accrued debts have made the refinery unattractive to any of them, thus their settling on Torentco.
Additionally, TOR said the partnership will allow the company to move from being an annual loss making entity to a sustained positive net cash flow during the lease, and demonstrate that crude oil can be processed at the refinery, achieving industry accepted yields if managed efficiently.
Moreover, the TOR-Torentco partnership will help curb the outflow of highly skilled personnel seeking opportunities in the Middle East and other regions.
TOR’s board and management stated that the transaction is already in its final stages of documentation and the company has an extensive list of ‘conditions precedent’ which Torentco must satisfy to demonstrate their ability to deliver all that is required in the transaction.
“If at any point they are unable to do so, the transaction will not become effective and TOR will be left to continue with its ongoing efforts to find a solution,” TOR stated.