Business in Ghana

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Posts Tagged ‘Tema Oil RTefinery’

IMANI Alert: Can the Tema Oil Refinery deliver today? A possible way out

Posted by Business in Ghana on September 7, 2014

The energy sector is undoubtedly the most essential sector if Ghana is to come out of its current economic atrophy.  President Mahama underscored this fact when he declared that the Atuabo Gas project in his view, is the game changer in Ghana’s energy mix and an attempt to resurrect the near moribund economy.  That the second Millennium Challenge Compact is dedicated to energy attests to the vision.

One essential player in the energy picture of this sector is the Tema Oil Refinery (TOR).  TOR was established by Ghana’s first President, Kwame Nkrumah with financial and technical support from Italian investors. TOR’s mandate at the onset was refining crude oil for Ghana and her neighbouring countries. TOR’s core business has over the years been broadened to include procurement, storage, refinery and distribution of crude oil. However many observers have argued that the ambitions of TOR whilst in keeping with a growing economy such as Ghana’s was not strategically anchored in a future vision for running it as a serious profitable business, hence its current near defunct and financially broke natural order.

We have seen successive governments design strategies some of which have involved large financial investments and bailouts of the institution-the result of which is the current recovery levy which became a public debate with various analyses emerging on how the country could generate value from such an economic venture. Such debates and discussions that did not bring closure to the TOR debacle, have resulted in the establishment of institutions such as Bulk Oil Distribution Companies (BOST), Bulk Distribution Companies and Oil Marketing Companies with various responsibilities and duties being assigned to each of these institutions to ensure that the procurement, refinery, storage and distribution of petroleum products within the supply chain are comprehensive to prevent frequent shortages. Recent developments have prompted further discussions of the revival of TOR and how to make it an efficient economic entity. However the following factors must be considered prior to undertaking such investment. Read the rest of this entry »

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