Torentco Asset Management Group has announced plans to invest $22 million in revamping and repositioning the Tema Oil Refinery (TOR) in Ghana.
The processes towards this realization are underway for the six-year lease agreement to be finalized and signed for the required maintenance to begin to get TOR working while the overall efficiency of the refinery is improved.
Under the agreement, Torentco will be responsible and collaborate with management in managing the affairs of the refinery and ensuring that staff members are not made redundant.
The deal is expected to bring numerous benefits, including increased security and economic stability. With a running refinery, Ghana will be able to process its own crude oil and ensure a steady supply of finished products, even during times of conflict or instability.
Bright Adongo, Chairman of the Senior Staff Union of TOR, stated that leasing the refinery to a strategic partner is essential to prevent its collapse.
He emphasized the importance of job retention and the potential for the refinery to contribute to the country’s economic growth.
Adongo also addressed concerns about Torentco running down the refinery, stating that as a private company, their intention is to invest in fixing and improving the facility.
He believes that Torentco’s significant investment demonstrates their commitment to the refinery’s success.
The Senior Staff Union of TOR expressed its support for the government’s decision to lease the refinery to Torentco.
They believe that the partnership will help restore TOR’s functionality and position it for sustainable operations. The union acknowledged the decline of TOR due to years of political interference, mismanagement, and insufficient investment.
While the lease agreement has sparked national concern, the union reiterated the urgent need to restore TOR’s operations to protect jobs and ensure fuel security in the country. They emphasized that the partnership will play a crucial role in stabilizing the Ghanaian economy.
According to the Union, “It is our considered view that the right investment has to be made now, other than that we risk losing our only refinery which is fast deteriorating. Quite obviously, we think the only way out now is to consider private participation in the running of the Refinery.
“It is on the basis of this, that we the Senior Staff Workers Union of TOR (PMSU of UNICOF) welcome the decision by the Board and Government to engage a strategic partner to revamp the Refinery and bring it back to operations to contribute to fuel security in the country and stabilization of the Ghana Cedi. We are confident that the initiative would also guarantee job security and improved conditions of service and bring hope at last to the suffering workers, many of whom are lacing their boots to join the exodus.”
He said it considers the yet to be finalized arrangements with the selected partner, Torentco Asset Management as the only viable option available to bring back the refinery into operation, since successive governments are hesitant to inject capital into the operations of the refinery.
“In particular, we consider as refreshing that apart from the annual and monthly rent that the partner will be paying to TOR, they will also be making a capital investment of $22million on the plants and other associated facilities.
“The investment is aimed at: 1.Maintaining and ensuring plant reliability and efficiency 2. Maintaining and restoring the company’s storage capacity 3. Installing equipment to co- efficient product accountability
“It is also important to clarify that per the terms of the arrangements, TOR is allowed to terminate the deal any time and refund the cost of investment to TORENTCO, if it finds a better alternative during the tenure of the agreement.
“As far as we concerned, there is currently no other concrete alternative better than what is being considered now. We therefore pledge our support to the Board, Management and the Government as it works to conclude the agreement,” Bright Adongo stated.
As part of the agreement, Torentco Asset Management Group will pay $1 million as annual rent and an additional rent amount of $1.067 million per month. The group is expected to refine up to 8 million barrels of oil annually during the six-year lease period.
It will be recalled that per a press release by TOR last year, Torentco was part of the company that submitted a proposal to partner in revamping TOR, got vetted and was selected as the most appropriate to meet the needs of the Refinery among the host of proposals that were presented.
By Vincent Kubi