TOR Seeks $450m To Support Operations

TheTema Oil Refinery (TOR) is seeking a $450-million facility from a French bank, BNP Paribas, to support its operations.

Already, officials have applied to the Ministry of Finance and Economic Planning for the release of the TOR recovery levy fund to be used as collateral to access the facility.

That, according to them, would also provide financial support to clean the company’s balance sheets of further debts.

The move is to make for efficiency in the company’s operations by ensuring the existence of revolving letters of credit (LCs) to address the perennial inactivity at the plant resulting from its inability to periodically raise LCs for crude oil purchase.

TOR officials are also holding discussions with Standard Chartered Bank of the United Kingdom (UK) for a $100-million working capital facility.

That, according to the Managing Director of the refinery, Mr Ato Ampiah, was to reduce the company’s dependency on the government for funding and also ensure its profitability.

In like manner, rehabilitation work on the Premium Reforming Plant (PRF), after eight years of inactivity, has begun as part of two key profitability projects meant to improve the financial capacity of TOR.

The PRF, which uses the heavy naphtha feed to produce high octane gasoline and liquefied petroleum gas (LPG), was shut down completely in 2004.

That followed the takeover by Vitol SA, a global dealer in crude oil and oil products, of the lifting of the product as a result of payment cost provided by Vitol for the construction of the RFCC Plant in 2002.

Addressing newsmen in Tema yesterday, Mr Ampiah said a revaluation of TOR’s assets was underway, while a plant efficiency optimisation programme to reduce wastage was also being carried out.

“TOR’s debts are as a result of unfair political pricing of petroleum products in the past which contributed considerably to deplete its capital base,” he said, adding, “The restructuring is, therefore, being done to ensure that our products are high in octane and competitive in price.”

The Residual Fluid Catalytic Cracker (RFCC) and the Crude Distillation Unit (CDU) were shut down on March 11, this year, following the unavailability of crude oil.

While the CDU came on stream on May 1, this year, after management had negotiated with officials of Sahara Oil for their parcels of crude oil being held on TOR’s storage tanks, production work at the RFCC was, however, yet to resume.

Mr Ampiah indicated that TOR’s overdependence on the government for financial support in the past had seen enormous political influence which virtually collapsed the refinery’s effectiveness.

Presently the government, he said, had paid outstanding debts amounting to GH¢1.450 billion as of March 31, this year, out of the GH¢1.779 billion debt in TOR’s books as of December 31, 2009.

That, he said, had significantly reduced the total debt stock to $601 million, including interest variations.

Mr Ampiah, who took exception to what he termed the persistent publication of falsehood in the media about the activities of TOR, defended the periodic shutdown of the two plants which was often occasioned by erratic supply of crude oil, saying, “Shutdowns are realistic, looking at the current situation facing TOR.”

He also debunked suggestions that the government’s inability to proactively respond to the financial needs of TOR was having a crippling effect on its sustainability.

Mr Ampiah was hopeful that the enlisted projects would go to resuscitate the company from its slumber.

graphic.com.gh