The Africa Center for Energy Policy (ACEP) has cast doubts about the lease agreement negotiations between Torentco Asset Management Group and the Tema Oil Refinery (TOR).
According to ACEP, Torentco is a newly established local Ghanaian company formed in January 2023 which lacks the track record in the petroleum business and cannot effectively take over TOR.
In an interview, the Executive Director of ACEP, Benjamin Boakye, expressed worry about the deal contending that Torentco is an infant company with little or no petroleum business experience.
“This is a new local Ghanaian company formed here in Ghana in January 2023, with no track record. If they fail to deliver, how do you hold them accountable? They don’t have any track record of dealing in petroleum businesses”.
Mr Boakye also emphasized the importance of a transparent and competitive bidding process to ensure that the best option is chosen rather than solely relying on the assumption that TOR is not profitable.
“In the last year alone, I have seen many companies interested in taking over the asset [TOR]. So open it up, be transparent about it, ask everybody interested and say I want $1 million, or I don’t want money. Who wants it, and what will you give me in return? And then you have bids that you can compare and choose the best out. The public will be interested in how you do it and agree with the process or disagree with it”.
“You just select someone because you think TOR is not making money and just give the company out in a manner that they are doing. I think it raises a lot of red flags and even raises concerns about whether the barest minimum being promised can be delivered. We don’t trace them to any serious company that we can be comfortable with and say we know this reputable company is behind it, and for anything at all, you can call or shame them,” he explained.
Background
The Senior Staff Union of the Tema Oil Refinery (TOR) backed the government’s decision to lease the refinery to Torentco Asset Management.
According to the union, leasing TOR will help revamp and reposition the company for sustainable operations.
Addressing concerns raised by analysts regarding the lease agreement, the workers union emphasized the urgent need to restore TOR’s functionality, citing years of political interference, mismanagement, and insufficient investment as contributing factors to its decline.
In their statement, the union stated, “It is based on this that we, the Senior Staff Workers Union of TOR (PMSU of UNICOF), welcome the decision by the board and government to engage a strategic partner to revamp the refinery and bring it back to operation to contribute to fuel security in the country and stabilization of the Ghana Cedi.”
The lease of the Tema Oil Refinery has attracted national concern after some analysts raised issues about the terms of the agreement.
The refinery will be leased to Torentco Asset Management Group for $22 million for six years and is expected to refine up to 8 million barrels annually.
Also, in the deal, the group will pay $1 million as annual rent and an additional $1.067 million per month.
The workers union welcomed the decision highlighting the potential benefits in terms of fuel security, stabilizing the Ghana Cedi, job security, improved conditions of service, and renewed hope for the workforce.