The current debt of the Tema Oil Refinery, which has remained inactive for the past four years, stands at $517 million, the acting Managing Director of TOR, Edmund Kombat, has said.
Mr Kombat said the debt, which the new management came to meet, was undergoing verification.
He said the $517 million is the debt situation as of December 2024.
“We are doing that verification and once we do that verification and authentication of what we have been able to bring down, that will be communicated publicly,” he said.
Source of debt
In an engagement with the Parliamentary Select Committee on Energy at Senchi on Sunday (June 22), Mr Kombat said the debt was triggered by trade debts, third parties and also legacy debts where crude was supplied but it was not paid.
“There were times that the Ministry of Finance in the past had given some funds to TOR and some of it, for example, was grants and then when they entered into the agreement with the IMF, the IMF asked them to reclassify it as debt.
“So, those things have accumulated to that amount of money and I think the last time TOR traded, some of the trades were not hedged,” he said.
Mr Kombat and officials of TOR had appeared before the 17-member committee, chaired by Emmanuel Bedzrah, to brief them on the programme and workplan of TOR this year as well as the challenges it faced.
Mr Kombat said there was a lot of exposure which led to the current debt of TOR ballooning.
“But we are here to make sure that that is stopped and is not repeated again,” he said.
He told the committee that President John Dramani Mahama’s agenda had been to revive the economy.
He said one of the things that the President had been talking about was to revamp the TOR.
He said since 2019 the residue fluid catalytic cracking (RFCC) had not been operate and since 2021 the crude distillation unit had also not run.
As a new management of TOR, he said the first thing that they did was to assess the plant to determine its readiness and the possibility of bringing it back.
“After assessing the plant, we realised that the plant was in good shape and that with a few technical works we could get the plant back and that is what we have been seriously working on.
He pointed out that the refinery plant had been out of shape as a result of debt that had accumulated over the years.
“We have tried to revalidate some of the debts, do renegotiation and reconciliation.
“And as a result, we have worked on it and some of the numbers are coming down and at the appropriate time we will ensure that the figures are out,” he said.
With the refinery not audited its financial account for the past six years.
“Since 2019, TOR has not had an audited account and one of the things that we decided to do was to focus on that and bring external auditors.
“And we are hoping that by the end of next month, all six years will be ready,” he said.
To turn the fortunes of the refinery around, he said steps had been taken do change management by re-orienting the staff to refocus them on performance, retool them and give them all the support that they needed.
For example, he said there had been a lot of disenchantment of staff over general conditions of service.
“One of the things we did was to sit through and listen to them and we had about 300 staff petitioning us.
“We reviewed their petition and all those who have not been promoted for several years were given due,” he said.
On the current stage of the company, he said management had been able to ringfence and build up some internally generated funds towards critical maintenance that was required to bring the refinery back.
On key outstanding issues, Mr Combat said the refinery had been plagued the refinery had been the energy sector levies Act (ESLA) receivables.
“Some of it has been used to pay some of the debts on behalf of TOR and we are appreciative of government for that.
“But there is still some outstanding and we are doing reconciliation with the Ministry of Energy and Ministry of Finance to get those outstanding fees to ensure that the President’s vision of bringing the refinery back is achieved,” he said.
He added that: “I can confidently tell you that before the year ends, TOR will be back”.
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