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Deal between TOR and Rentco: Reopen selection process to choose new partner – Minority to government

Deal between TOR and Rentco: Reopen selection process to choose new partner – Minority to government

In order to choose a strategic partner for the administration of the Tema Oil Refinery (TOR), the minority in parliament is requesting that the procurement process be reopened.

This comes after it was allegedly agreed to lease the state refinery for at least the next six years to Torentco Asset Management.

Earlier, the board and management of TOR had defended the contract with Torentco by claiming that, despite their desire to work directly with a significant global corporation, they ultimately decided to settle on Torentco because of TOR’s mounting indebtedness, which rendered the refinery unattractive to many.

The agreement would enable TOR to transition from being an annual loss-making concern to having a consistent positive net cash flow throughout the lease, management noted in a three-page document to the media.

It will also demonstrate that crude oil can be processed at the refinery and help TOR to achieve industry-accepted yields if managed efficiently.

Finally, the partnership will stem the exodus of skilled staff to the middle east and other parts of the world to secure opportunities.

Management stated that the transaction is already in its final stages of documentation and the company has an extensive list of ‘conditions precedent’ which Torentco must satisfy to demonstrate their ability to deliver all that is required in the transaction.

“If at any point they are unable to do so, the transaction will not become effective and TOR will be left to continue with its ongoing efforts to find a solution,” the report added.

But speaking to journalists in Parliament, Minority Spokesperson on Energy, John Jinapor described the current deal as a rip-off.

“We have become aware of attempts by the Akufo-Addo government to lease the Tema Oil Refinery for a six-year period to a company known as Torentco Asset Management company.

“Our checks have indicated that the company has no track record when it comes to the oil sector and its balance sheet does suggest that it cannot provide the needed support for the Tema Oil Refinery.

“The Tema Oil Refinery is a strategic asset. It is the only state refinery capable of refining about 45 thousand barrels of oil a day. If Tema Oil Refinery is well positioned it will result in millions if not billions of savings when it comes to import substitution.

“Unfortunately, the Akufo-Addo-led government has been sleeping on the job and has left the refinery to rot having failed to continue the progress made by the Mahama-led administration.

“They have decided to lease the Tema Oil Refinery to Torentco Asset Management and if you read the details of the contract they are supposed to refine just about 8 million barrels. That is woefully inadequate.

“We believe that that contract will not be to the benefit of the country, that contact will not benefit the ordinary Ghanaian and that contract will not give value for money,” he said.

The Yapei-Kusawgu MP stressed that a new and transparent process must be initiated to select another partner for TOR.

“The refinery alone has seen about five different managements under the Akufo-Addo administration. It does appear like they are playing with the refinery.

“It appears there is no seriousness when it comes to the management and revitalization of the refinery, and so we call on government to immediately halt this lease agreement and ensure that we go through a transparent process that gives everybody a fair playing field and equal opportunity so that eventually we can identify a strategic partner that will not only ensure that the refinery is put to good use but it serves the overall interest of the nation.”

Meanwhile, the Energy Ministry says Tema Oil Refinery (TOR) and its prospective partners, Torentco, have not signed any contract yet.

It said nothing has been resolved despite the fact that talks between the state agency and Torentco are still ongoing.

In a press release on Sunday, June 25, the ministry’s spokesperson, Kofi Abrefa Afena, urged those who were critical of the sector minister, Dr Matthew Opoku Prempeh, to confirm their claims before making them public.

“Dr. Matthew Opoku Prempeh as Energy Minister has demonstrated without a shred of doubt, his total commitment to getting TOR back to work in line with the vision of His Excellency the President.”

“Indeed, the board, management and staff of the company are on record to have touted the numerous positive interventions of the Minister in this regard several times.”

“Government’s quest to find a credible partner towards revamping the company involves key state actors such as the State Interests and Governance Authority (SIGA) and the Attorney General’s Department,” the statement said.

A key player in Ghana’s energy sector, TOR, has for years encountered many difficulties, including operational inefficiencies and budgetary limitations.

In view of this, the management of TOR revealed in a statement that it has started a thorough review of alternative remedies after realising the necessity of dealing with these concerns.

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