TOR trots for juicy take-off…as it redefines competition

…welcomes new refineries

By J. Ato Kobbie, Managing Editor – Business Analyst
The Tema Oil Refinery (TOR), which received a new lease of life last month, after reeling under a suffocating debt to the Ghana Commercial Bank (GCB) for years, has now redefined its competition and charting a growth pole to become the first choice of import for bulk distribution companies (BDCs).

Disclosing this to The Business Analyst in an interview in his office last Monday, the Chief Executive Officer (CEO) of the state oil refinery, Mr. Ato Ampiah said Government intervention in cleaning off a balance of GHC572million indebtedness to GCB, that had stayed on the books of TOR for years, was crucial, not only for the refinery, but GCB as well.

According to Mr. Ampiah, apart from the limitations that the indebtedness imposed on the company, it affected also the ability of GCB to operate effectively and advance credit to other critical areas of the economy, thereby weakening the entire banking sector and the economy as a whole.

The TOR boss said the recent government intervention will accelerate a growth pole it had already started charting and that will save tankers, oil marketing companies (OMCs), and others in the supply chain, which will otherwise go under, if TOR went that way.

He said it was a commercially unwise decision to have associated the name of TOR with ‘Debt’ as happened with the so-called ‘TOR Debt,’ which in actual fact represented the cumulative balance of what Ghanaians in general had consumed over a decade and deferred payment for.

He said what that did was to erode confidence in the refinery and difficult to do business effectively.

Explaining the benefits of measures that management had put in place to arrest the situation of the past, Mr. Ampiah said TOR has for a year now, as a matter of policy, not borrowed from banks and “measures are in place to ensure that TOR becomes a cash cow!”

The TOR boss said even before the last government rescue mission, operational efficiency of the refinery alone had brought confidence in the company and international banks were ready to deal directly with TOR.

“We are already moving towards import parity, where we can’t be touched. So, we are redefining our vision and role and want to operate in such a way that we will be the first point of call for any bulk distribution companies (BDCs) who want to import products,” 
“We are investing in the future, which is longer than today,” Mr. Ampiah told The Business Analyst, citing some measures he said had been put in place since December 2010 for the turn-around of the company to include the production of higher octane fuel, saving GHC55million from utilizing its own gas, reduced flaring and cutting down on fuel energy, waste and general costs.

Mr. Ampiah revealed that TOR does not sell directly to oil marketing companies (OMCs) anymore, but through (BDCs) licensed by the National Petroleum Authority (NPA) as such. TOR, so far deals with Nine BDCs, namely: CHASE Petroleum Company Ltd, Cirrus Energy Ltd, SAHARA Energy Ltd, Fuel Trade, Bulk Ship, Sage-Eco Petroleum, Vehama, Oil Channel, and Ebony Oil and Gas.

On TOR’s relationship with the Ghana National Petroleum Corporation (GNPC) Mr. Ampiah said the national oil company came to TOR’s rescue at a time it was seriously challenged.

“GNPC was our brother in time of need and therefore we’ve collaborated and still do,” Mr. Ampiah asserted, adding that since GNPC assisted with a lifting in January, however, TOR has been managing to raise Letters of Credit (L/Cs) by itself.

Asked about how TOR was positioning itself with news of new refineries emerging in the country, Mr. Ampiah said TOR was already ahead and welcomed new entrants as that brings new opportunities.

He revealed that TOR itself was looking at expanding its production capacity to 120,000 barrels of crude per day and was ready to host new refineries, which will lead to sharing of knowledge, services and maintenance points.

“It is Ghana which needs the investment and not the fright of the competition,” Mr. Ampiah asserted. He said the market is out there and not here. 
Ghana’s Oil Find and TOR
“If Ghana doesn’t price its oil well, I won’t buy it,” he said when asked what TOR made of Ghana’s oil find, saying TOR was always looking for the best product and terms.

He expressed the hope however, that considering proximity and other relativities it may be necessary at some point to buy from home.
Mr. Ampiah looks forward to TOR becoming very profitable and paying dividends to government as it tracks the growth pole it has charted which will lead to higher turnover and opportunities to train more people to meet local content requirements.

The TOR boss described as unfortunate the dimension taken by a recent $48million crude supply to the refinery and advised the media to try and acquire knowledge in specialized areas in order not to be misled by unscrupulous persons.

He said in that instance, some local media became collaborators in what was purely an attempted fraud.


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