New TOR board will focus on making refinery a profit-making institution – Board Chair

New TOR board will focus on making refinery a profit-making institution – Board Chair

The newly constituted board of directors of the Tema Oil Refinery (TOR) can turn the country’s premier oil refinery into a profitable institution if allowed to stay focused on its core mandate without irregular interference from external interests and persons who seem determined to prevent TOR from working to provide quality energy products and services to power Ghana’s economic growth in an environmentally sustainable manner, a source familiar with the activities of the new board has told the media.

President Akufo-Addo on Monday, 18 March 2024 in a letter signed by the Secretary to the President Nana Bediatuo Asante and addressed to the Minister for Energy, Matthew Opoku Prempeh (MP), announced his decision to constitute a new 11-member board to be chaired by a member of the previous board, Mr Leon Kendon Appenteng, who has over 35 years professional experience in commerce, trade and manufacturing to his credit.

The ten other members of the board are Kofi Mocumbi Tagoe, the newly appointed Managing Director of TOR, Dr Antoinette Tsiboe-Darko, Edith Sapara-Grant; Nana Akua Bakoma Prempeh, Lorraine Crabbe Ababio, Joseph Mensah Browne Alfred George Thompson, Paul Kwaku Kyei Ofori, Kwame Baffoe, and Herbert Ato Morrison. The board is expected to be sworn into office on Tuesday, 26 March 2024 by the Energy Minister, Matthew Opoku Prempeh.

“A scrutiny of the members of the new TOR board reveals that it is made up of very experienced persons from the oil and gas sector, academia, political space, finance and banking, law, and policy formulation, among others. It is my considered opinion that with this level of rich expertise, TOR as an institution has been given a fresh opportunity to regroup and to chart a new path of growth, cost-effectiveness, and productivity,” the source close to the new board said.

Union Concerns

Ahead of the formal swearing-in of the board, Bernard Owusu, the Chairman of the General Transport, Petroleum, and Chemical Workers Union (GTPCWU) of the Trades Unions Congress (TUC), one of the small unions associated with the working body of TOR, is on record to have called for the dismissal of the board chair nominee over what he claims to be his involvement in the suspended Torrenctco – TOR partnership arrangement. The GTPCEU went as far as sending baseless letters to the Attorney General (AG) and the Office of the Special Prosecutor (OSP) which yielded no results.

Sources close to the TOR board explain that while it is true that the new board chair nominee was a member of the previous board, there is no evidence to show that he was engaged in any shady deal concerning the Torrenctco botched deal.

“Leon Kendon Appenteng participated in all the efforts of the then TOR board which he was a part of in their quest to secure a good deal for the refinery. The deal had challenges and the same could not materialize. Effectively, the deal is dead because the directors at Torrenctco/TEPL and their partners sent a letter to TOR on 27 November 2023, suspending their involvement in the transaction. The new board must simply look at other options,” the source said.

“The Leon Kendon Appenteng-led board is made up of very experienced and qualified personalities who have demonstrated in their endeavours how committed they are to their assigned responsibilities. The woes of TOR are many but I have every confidence in this new board of directors to turn the situation of TOR in the shortest possible time after they take office,” the source within the TOR board further pointed out.

TOR-Torrenctco deal

In June 2021, the Minister for Energy appointed a three-member Interim Management Committee (IMC) to oversee the affairs of the Refinery as part of the government’s effort to restructure the company.

One of their terms of reference among others was ‘Receiving and assessing viable partnerships for TOR’. The IMC during their tenure received two (2) proposals from local and international companies. The companies were Intercontinental Energy-Dubai and Africafinch-Dubai.

The expression of interest drive continued when the new board of directors took over. The IMC had reviewed the proposal of Intercontinental Energy and approved it before the new board of directors was sworn in March 2022.

The new board received a proposal from Decimal Capital and invited all three companies to do a presentation as reflected in the board of directors’ minutes of 7 April 2022. The proposal from Decimal Capital received unanimous approval from the new board.

The other proposals required a government guarantee which was rejected by the Ministry of Finance. TOR hired a transaction advisor and a project implementation committee was set up by the management to negotiate the proposal from Decimal Capital.

This negotiation took six months and the agreed term sheet was sent to the Ministry of Energy and State Interest and Governance Authority (SIGA) for their approval. These approvals were given and the terms were to be incorporated in a lease agreement.

Special purpose vehicle (SPV)

Decimal Capital as part of their proposal will incorporate an SPV to sign the lease agreement with TOR. This practice is very common in corporate transactions. The company Torrenctco Asset Management Limited was incorporated in January 2023 as a special-purpose vehicle.

The current state of TOR

Tema Oil Refinery has never been a profit-making asset of the country. The historical records will show that the debt of the refinery nearly collapsed Ghana Commercial Bank 20 years ago. This led to the introduction of the “TOR Debt Recovery Fund Levy”. This fund was enacted into law in 2003 as Act 642.

In 2003, the TOR debt stood at GHc 450 million. ACEP in October 2021 put out a report called Plugging the Two-Decade Leak to give an insight into the debt and challenges at TOR. In section three of that report, ACEP reported that: “Between 2014 and 2018, TOR’s losses were above GHC300 million annually, recording the highest in 2014 at GHC927 million and the least in 2018 at GHC382 million.

Cumulatively, the total loss over the five years amounts to GHC2.707 billion against total revenues of GHC1.263 billion. Tema Oil Refinery (TOR) made a loss of GHC1.675 billion, according to the 2022 income statement of the company.

This is the same company that some so-called experts are writing in the media that the company can make a US$ 700 million profit a year. Currently, TOR owes staff pensions (SSNIT, TIER 1 and 2), Ghana Revenue Authority, Ghana Water, Electricity Company of Ghana, and many other companies.

The total TOR debt to date is US$540 million and growing by the day. The refinery has not refined any crude oil since March 2021, meanwhile, the workers are paid every month.

The refinery

Founded on 12 December 1960, as the Ghanaian Italian Petroleum (GHAIP) Company, Tema Oil Refinery (TOR) stands as Ghana’s premier crude oil processing facility. Originally Italian-owned, the government became the sole shareholder in April 1977, prompting a name change to TOR in 1991. Today, TOR is authorized to refine and sell petroleum products, playing a vital role in Ghana’s energy sector.

The vision of TOR is to provide quality energy products and services to power Ghana’s economic growth in an environmentally sustainable manner as well as to be a preeminent refinery, a pride for Ghanaians.

At the heart of Tema Oil Refinery (TOR) lies a strong set of fundamental values that serve as the foundation for TOR’s operational culture. The Refinery’s commitment is expressed through these principles, which also influence workers’ daily decisions and actions.

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