TOR has $517m in debt to clear – MD

The Tema Oil Refinery (TOR) has a US$517 million debt to clear, Edmond Kombat, the Managing Director of the Tema Oil Refinery (TOR), has disclosed. 

Mr Kombat explained that, at the time the previous NPP government took over the management of TOR, the refinery had a debt of US$350 million; the debt has increased because it has not been paid. 

He mentioned that the component of the debt included TOR owing the Ghana Revenue Authority (GRA), Staff’s Provident Fund, SSNIT penalties, Electricity Company of Ghana, Ghana Water, and the government of Ghana.  

 “There was also crude oil that was bought within the intervening period, which also accumulated around 40 million, and the refinery couldn’t pay staff workers.

“There were times when they had to borrow money to pay the workers’ salaries, and there was just a lot of distress in the plant,” he said.

Mr Kombat made the revelation at an energy-sector reporting workshop for journalists in Tema, organised by Energy News Africa in collaboration with the Tema Regional Branch of the Ghana Journalists Association (GJA).

The workshop was on the theme: “Leveraging Social Media and AI for Accurate and Effective Energy Reporting: Trends, Tools, and Best Practices.”

He explained that when he was the Deputy MD under President John Dramani Mahama’s first administration, TOR had a debt profile of $650 million, accumulated from trade debts and from contracts with accrued interest payments. 

He added that in 2015, President Mahama had established the Energy Sector Levy Act (ESLA), which included a TOR debt recovery levy, whose purpose was to ensure that the refinery’s debt was cleared.

 “At the time, TOR owed about four major banks, totalling about US$300 million, and those banks at the time were on their knees, almost collapsing.

“So, the ESLA that was introduced was a bond issued, and about US$300 million of those $650 million were paid off,” he noted.

 He said they worked and brought the refinery back to functionality, explaining that it refined around 7 million barrels of crude before leaving; this included TEN crude, which is from Ghana.

Mr Kombat emphasised that this showed that the refinery could refine Ghanaian crude, contrary to what Ghanaians were told in the past. 

He further said that by the time they left office, the plan was for TOR to utilise a portion of the ESLA receivables to clear the debt, adding that within three years, all of TOR’s debt was supposed to be cleared, hopefully by 2019.

“But unfortunately, when there was a change of government, I think there were different priorities, so an ESLA PLC was formed, and then the vision shifted.”

Mr Kombat further disclosed that there was a high staff attrition rate, as many of the refinery’s skilled workers decided to leave Ghana, with some going to the Middle East and others to the Dangote refinery, as they did not see their future with TOR.

He said, in addition to the debt, there was a lot of bitterness among the staff because of a lack of promotion, noting that he asked the affected staff to petition management, which he personally chaired, and that out of the 300 petitions received, 250 deserving staff were promoted.