Page 5 - DMEA Week 48

DMEA Commentary DMEA
crude imports. e re nery’s management was subsequently strongly criticised in December by the local Institute for Energy security for the deal due to have returned the plant to pro table functioning.
TOR allegedly lost $24mn through a awed sales and purchase agreement (sPA) with the UK’s BP, receiving a shipment of 950,000 barrels of Bonny Light crude in October without hav- ing concluded o ake agreements for the re ned product.
e inability of Tema to process local crude is another long-standing bugbear of critics. e idea of investing in a major upgrade and expan- sion of the existing plant, initially to 60,000 bpd, has periodically resurfaced.
takoradi plans
In March, Ghana’s cabinet approved plans for the establishment of a downstream hub in the Western Region, paving the way for the thorny process of land acquisition to begin. e planned zone would include a long-mooted second re n- ery at Takoradi, near the main o shore oil and gas elds.
Independent local energy organisations have criticised the proposed state outlay on the new plant ahead of commitment by the private part- ner envisaged becoming the lead investor. ey also called on Accra to focus instead on rehabil- itating the under-performing, heavily-indebted existing TOR.
Plans for the creation of an energy sector hub, which would encompass re ning, storage, trans- portation and trading, were laid out in January 2018 by then-Energy Minister Boakye Agyarko.
he was sacked in August over a mismanaged
private power contract but his successor John Peter Amewu told an audience of businesspeo- ple this month that the scheme’s execution in the Western Region had received cabinet approval.
e state would serve as the facilitator for pri- vate investment, acquiring the land and building the requisite infrastructure, with a team having begun the di cult process of negotiating land acquisition for the site, he said.
Ghana became an oil producer in 2010 with the commissioning of the Jubilee eld, o the west coast near Takoradi, and the devel- opment of a green eld re nery in the area has been mooted since the rst half of the decade. Texas-based Cox Oil announced plans in 2014 to develop a $600mn plant with capacity of around 65,000 bpd as part of an expansion pro- ject at Takoradi Port but the investment failed to materialise.
Accra’s continued commitment to the planned Takoradi re nery was signalled by the inclusion in the 2019 spending programme of state-owned Ghana National Petroleum Corp. (GNPC) of $50mn towards the project.
This was met with scepticism by the local Africa Centre for Energy Policy (ACEP) think- tank. In a critical analysis of the company’s entire expenditure plan, ACEP said that the sum was to be advanced to allow a potential private investor to conduct a feasibility study on the Takoradi re nery scheme in exchange for a future GNPC stake of 15% in the project company. however, it had not enlisted such a partner nor, therefore, did it have any guarantee of a return.
For the future of Ghanaian re ning, much will depend on the ability of the latest deal to bring about some stability at TOR.™
Week 48 05•December•2019 w w w . N E W S B A S E . c o m P5