Here’s how much Ghana’s Oil Refinery needs to revamp operations

The Managing Director of the Tema Oil Refinery (TOR) Isaac Osei has revealed that they will need about $500 million in order to operate at full capacity each year.

“When TOR is operating, in the whole year, we will probably spend about US$500 million. But for the same products, the industry will probably spend about US$1.2 billion and so it is important that TOR works.”

He said the TOR is aiming to holistically address the country’s chronic reliance on imports for refined petroleum products.

He said this is enough reason for the government to support the refinery’s ongoing revival process to help prevent the drain of foreign exchange on Ghana’s economy.

“That kind of leakage from our own country in terms of FX clearly puts pressure on the cedi,” he said.

Last year, imports of refined petroleum products grew by 15.7 per cent to almost US$2 billion, although national consumption declined to 3.46 million tonnes.

Mr Osei was speaking to the Energy Minister, John Peter Amewu when he paid a familiarisation visit to TOR.

TOR has an installed capacity of 45,000 barrels per stream day (bpsd). The refinery is also working to raise its installed capacity to 60,000 bpsd to help meet national consumption and also export some.

He added that the refinery would further partner an investor to establish a US$3.5 billion Greenfield refinery with an installed capacity of 150,000 bpsd, more than triple of its current capacity of 45,000 bpsd.

Until October this year, TOR had not been able to secure crude oil on its own account to refine since 2014.

It rather engaged in tolling for third parties due to lack of finance to secure crude oil supply deals.

In October 2018, TOR secured some 947,000 barrels from BP Petroleum International on credit to resume processing. This was after TOR partially cleaned up its books and restructuring of its operations.

The MD said “since we bought our crude oil, the price of crude has gone down quite substantially. From around US$83, now we are talking of mid-US$ 60.”

“So, clearly, we will not realise the generation of funds that we had expected at the beginning of the arrangement,” he added.

He added that the management was taking measures to help mitigate the effects.

Responding to this Mr Amewu advised TOR to consult the Ministries of Energy and Finance in subsequent crude oil purchase arrangements which will help reduce such risks.