TOR Faces $517m Debt Burden
The Tema Oil Refinery (TOR) is grappling with a significant debt of US$517 million, according to Managing Director Edmond Kombat.
Mr. Kombat revealed this at an energy-sector reporting workshop in Tema, organized by Energy News Africa and the Ghana Journalists Association (GJA). He explained that when the previous New Patriotic Party (NPP) administration took over, TOR’s debt stood at US$350 million, a figure that has since increased due to non-payment.
The debt comprises outstanding amounts owed to the Ghana Revenue Authority (GRA), the Staff Provident Fund, SSNIT penalties, the Electricity Company of Ghana, Ghana Water, and the government itself. “There was also crude oil that was bought within the intervening period, which also accumulated around 40 million, and the refinery couldn’t pay staff workers,” he stated.
He recounted instances where funds had to be borrowed simply to cover employee salaries, leading to considerable distress within the refinery.
Looking back, Mr. Kombat, who previously served as Deputy MD under President John Dramani Mahama, noted that TOR’s debt had reached US$650 million by that time, stemming from trade debts and contractual obligations with accrued interest.
In 2015, the Mahama administration introduced the Energy Sector Levy Act (ESLA), including a TOR debt recovery levy, specifically aimed at clearing the refinery’s liabilities. “At the time, TOR owed about four major banks, totalling about US$300 million, and those banks at the time were on their knees, almost collapsing,” he said. “So, the ESLA that was introduced was a bond issued, and about US$300 million of those $650 million were paid off.”
Mr. Kombat highlighted that during his tenure, TOR was restored to functionality, processing approximately 7 million barrels of crude, including TEN crude sourced from Ghana. He emphasized this demonstrated the refinery’s capability to handle Ghanaian crude, challenging previous assertions.
The plan, he added, was for TOR to utilize a portion of the ESLA receivables to fully settle its debt within three years, ideally by 2019. However, he lamented that a change in government led to a shift in priorities, with the formation of ESLA PLC altering the original vision.
Furthermore, Mr. Kombat disclosed a concerning trend of skilled workers leaving TOR for opportunities abroad, including the Middle East and the Dangote refinery, citing a lack of confidence in the refinery’s future. He also addressed staff morale, mentioning that upon his request, employees submitted 300 petitions regarding promotions, resulting in 250 deserving staff being elevated.
Image Source: MYJOYONLINE
