Cede part of the Tema Oil Refinery (TOR) to private investors to revamp and improve the company’s operations, Managing Director of Tema Oil Refinery (TOR), Isaac Osei, has recommended to government.
According to him, such an arrangement was necessary to ensure the right investment as well as address capacity challenges and compliance to regulatory system instituted by the National Petroleum Authority.
Speaking on the sidelines of the Ghana Energy Summit in Accra yesterday, he stated that, “there have to be some private sector participation in the refinery industry. With TOR, I think the government must cede equity to bring in investors. When the private sector has ownership in TOR, they will bring their expertise, experiences and funds to enable the company function more efficiently”.
On the theme, ‘Harnessing opportunities in Ghana’s energy sector-Making local participation a practical reality’, the two-day summit brought together industry experts to explore ways to build and enhance the capacity of local companies to deliver products or services at a level required by the global energy industry.
Presently, TOR, which is authorised by law to operate both as a refiner of crude oil and seller of petroleum products, has been solely owned by the government since 1977.
Mr Osei said the company was still saddled with working capital issues, stressing that, there was the need for capital injection to keep it afloat and remain competitive.
On the government’s vision to build a petroleum hub, Mr Osei reiterated the need for robust upstream and downstream oil sectors which could generate products and services for the industry, as well as build linkages between the upstream, midstream and downstream sectors to promote partnerships and capacity building.
He said in creating the hub, there was the need to consider transportation and delivery system was a core in the petroleum industry stating that currently, the transportation of fuel products through vehicles was costly and a disincentive to investors.
Deputy Minister of Energy, William Owuraku Aidoo, said the government was aggressively pursuing basin promotion especially in the Western, Central, Eastern, Outer Continental Shelf and Voltaian Basins to attract more companies into the basins to increase exploration activities using an open and transparent public competitive tender process in the award of petroleum blocks.
He stated that it was focused on increasing investments, improving service delivery and the financial health of the companies as well as enhance upstream activity, improve reserves and increase oil and gas production.
Chief Executive Officer, African Energy Consortium, Kwame Jantuah, urged the government to allocate production of oil onshore for local companies as part of efforts to promote local content participation in the oil and gas sector.
He believed that local companies have the expertise and capacity to exploit potentials in onshore oil production which did not require knowledge and know-how mostly lacked by Ghanaian entities.
He, however, expressed concerns about the siting of the petroleum hub in the Western Region arguing that, “Transporting of oil from the Voltaian Basin, which is about 104,000 kilometres square onshore oil basin, spreads across the country with 52 per cent of it located in the Northern Region, to the hub would increase cost of production.”
Abigail Asolange Harlley, Chief Executive Officer of AI Energy, proposed to government to institute tax breaks for private investors to encourage local participation and develop a regulatory framework that spells out the roles of both the government and the private sector in enhancing local participation in the oil and gas sector.
BY CLAUDE NYARKO ADAMS and MALISA TETTEH