Page 9 - AfrOil Week 48 2019

AfrOil POLICY AfrOil
 The bilateral agreement between Sudan and South Sudan dates back to 2012. It provides for the former to accept a transit fee of $9.48 per barrel for South Sudanese oil shipments, and it obligates the latter to deliver 28,000 barrels per day (bpd) to Sudan for domestic use.
Additionally, it obligates South Sudan to pay Sudan the sum of $3bn by December 31, 2019 as compensation for the loss of income from the development of oilfields that are now located in South Sudan.
Earlier this year, Juba asked for the deal to be
revised because the government would not be able to pay Khartoum the agreed amount by the end of December. It has already paid more than $2.3bn and has suggested raising the pipeline transit fee to $15 per barrel to cover the remain- ing $661mn. However, the Sudanese govern- ment has asked for payment in kind.
According to Hamid, the parties are due to resume discussions on the matter in early December. Juba and Khartoum may be able to strike a deal on the method of payment during those talks, he said. ™
PROJECTS & COMPANIES
TOR signs deal to refine crude
GHANA
GHANA’S Tema Oil Refinery (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 Resrouces.
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.”
Osei noted Woodfield Energy Resources’ “long history” with TOR would ensure that the facility would continue processing of crude for the foreseeable future.
He noted 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 refiner.
Osei added that TOR was also discussing similar arrangements with other traders includ- ing BP and Gemcorp.
A recent S&P Platts survey showed that TOR “continues to operate intermittently after enduring years of stops and starts due to tech- nical and financial problems”.
This said that the facility’s crude distillation unit (CDU) had been closed for a week, and quoted a source as saying: “We’ve been refining since July 2019 but only through the CDU. The last time the fluid catalytic cracker was opera- tional was in April, 2019.”
Platts added that the CDU only had one furnace and was operating at around 25,000- 26,000 barrels per day (bpd).
The government’s record in securing pri- vate investment in the refining sector is poor. An agreement under discussion in 2014 with little-known Riyadh-based PetroSaudi that called for the company to take a strategic stake in state-owned 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 compa- ny’s possible participation in Ghana’s refining sector.
China’s Sinopec, which has shown eagerness to enter the African refining 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 greenfield plant might better be spent “to find a solution to the sorry state of the Tema Oil Refinery”. The 56-year-old facility near Accra has been operating at barely more than half of its 45,000 bpd nameplate capacity since the shutdown of one of the fur- naces in early 2017.
This has left the bulk of local demand of 70,000 bpd to be met by imports, at consider- able cost to the treasury.
Output has periodically been cut to zero as a result of faults at other units, notably the resid- ual fluid 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.
Ghana’s TOR oil refinery (Photo: Asempa News)
Week 48 04•December•2019 w w w . N E W S B A S E . c o m
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