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The government, through the Ministries of Energy and Finance, has supported the Tema Oil Refinery (TOR) to replace its burnt furnace for it to be able to process more crude oil for the local and international market.
The refinery said the installation of a new furnace started earlier this year, and was expected to be completed soon to allow for deployment in the fourth quarter.
It added that it was expected that the replacement of the furnace would allow TOR to climb back to its installed capacity of 45,000 barrels of crude oil per stream day (bpsd).
The furnace imploded in January 2017, resulting in TOR’s production capacity falling to 25,000bpsd and bringing with it a reduction in revenue.
In a statement issued on May 25, TOR said although the refinery had procured the furnace from its own resources, it was unable to fund the installation due to financial constraints.
“However, with the support of the Ministry of Energy, TOR was able to source funds in February 2021 through the Ministry of Finance to complete this revenue generating project.
The contractors are now on site and expected to commission the project by the fourth quarter of 2021,” the statement from the Corporate and Public Affairs Department of the TOR said.
It noted that the loss of the furnace in 2017 had “a fundamental impact on TOR’s ability to pay its fixed costs, arrears and other payment obligations” and further expressed the hope that its completion and deployment would help ease the financial constraints.
It said contrary to allegations that the refinery was at the verge of collapse, TOR had regained the trust of investors, with many expressing interest in doing business with it.
According to the statement, the refinery was being positioned for its effective turnaround and revitalisation through the support of its shareholder, the government.
“Several potential investors and partners have, in recent times, expressed interest in either partnering TOR or providing funds for the revitalisation and expansion of TOR. These are indeed exciting times for Ghana’s premiere refinery to realise its vision,” it said.
It said the TOR debts, which date to 2009, were currently in excess of $400 million and measures were being taken to clear them.
It said efforts by management had already led to the payment of GH¢1 billion debt that accrued between 2009 and 2016.
The company said the payment was made by the government as part of its support to TOR.
“A further $167 million of the debt carried over from 2009 to 2016 has also been paid by the government,” it said.
It explained that a business and revitalisation plan had been developed as part of the guide and application for the recapitalisation of TOR.
It said this was to ensure that the refinery did not revert to the days of debt accumulation after it had been revived.
“The management of TOR continues with its efforts to clear all other debts by agreeing payment plans for all legacy statutory debts such as Ghana Revenue Authority (GRA), Social Security and National Insurance Trust (SSNIT) and tier two contributions of workers. However, for the year 2021, TOR endeavours to remain current on all statutory debts when they become due,” it said.
It said the company was also in discussion with the Ghana Water Company Limited and other creditors to agree payment plans for settlement of legacy debts.
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