Page 4 - DMEA Week 48

DMEA Commentary DMEA
In stability bid,
TOR signs deal
to refine crude
Ghana’s beleaguered Tema re nery has agreed a deal aimed at guaranteeing feedstock, with hopes that a new approach will bring about stability.
afrICa
What:
A deal has been agreed that will see the state re ner toll volumes
on behalf of Wood eld Energy Resources.
Why:
The Tema Oil Re nery has been processing inconsistent volumes of crude over the past few years owing to technical and nancial issues.
What next:
Plans have been mooted to develop a downstream hub at the port of Takoradi in the west of the country, but little progress has been made.
GhANA’s Tema Oil Re nery (TOR) this week agreed a deal that would see the facility, which has consistently struggled to process oil, toll 11mn barrels of crude for Woodfield Energy Resources.
TOR managing director Isaac Osei told local media: “TOR, which hitherto was in the news for lack of crude, has continuously processed circa 4mn barrels of crude oil out of a total of 11mn barrels since August 2019.”
Alluding to the consistency issues faced by TOR, he noted Wood eld Energy Resources’ “long history” with TOR would ensure that the facility would continue processing crude for the foreseeable future.
Osei said that the tolling model would mean that crude is processed for or on behalf of third parties at a fee, leavening the risk burden on the re ner.
TOR was also reported to be discussing sim- ilar arrangements with other traders including BP and Gemcorp.
Issues
A recent s&P Platts survey showed that TOR “continues to operate intermittently a er endur- ing years of stops and starts due to technical and nancial problems”.
is noted that the facility’s crude distillation unit (CDU) had been closed for a week, and quoted a source as saying: “We’ve been re ning since July 2019 but only through the CDU. e last time the uid catalytic cracker was opera- tional was in April, 2019.”
Platts added that the CDU only had one fur- nace and was operating at around 25,000-26,000 barrels per day (bpd).
Despite e orts to upgrade and add to down- stream capacity, the government’s record in securing private investment in the refining sector is poor. An agreement under discussion in 2014 with little-known Riyadh-based Petro- saudi that called for the company to take a strate- gic stake in TOR and invest in the plant’s upgrade
and expansion likewise collapsed.
Petrosaudi had no experience in the sec-
tor and has recently attracted attention for its involvement in Malaysia’s multi-billion dollar 1MDB corruption scandal.
however, during a conference in India in mid-March, Vice President Mahamadu Bawumia emerged from a meeting with local downstream giant Reliance Industries Ltd (RIL) claiming to have discussed the company’s possi- ble participation in Ghana’s re ning sector.
China’s sinopec, which has shown eagerness to enter the African re ning sector and which has been deeply involved in the development of the gas infrastructure in the Takoradi area, might also be a prospective investor.
ACEP’s scathing analysis suggested that funds earmarked by Ghana National Petroleum Corp. (GNPG) for a green eld plant might bet- ter be spent “to nd a solution to the sorry state of the Tema Oil Re nery”. e 56-year-old facil- ity near Accra has been operating at barely more than half of its 45,000 bpd nameplate capacity since the shutdown of one of the furnaces in early 2017.
This has left the bulk of local demand of 70,000 bpd to be met by imports, at considerable cost to the treasury.
Output has periodically been cut to zero as a result of faults at other units, notably the residual uid catalytic cracker. speaking to the press in Q1, TOR’s Osei blamed the dilapidation on the previous government, under which three cycles of turnaround maintenance had been missed. he announced improbably that full capacity would be reached by september. however, pop- ular patience with such excuses is wearing thin after more than two years under the current administration.
The company’s financial condition is con- tributing to and compounding TOR’s oper- ational deficiencies. The state firm remains heavily indebted and in June 2018 was forced to shut down owing to its inability to nance
P4
w w w . N E W S B A S E . c o m Week 48 05•December•2019