May 27, 2024

The lease negotiation between Tema Oil refinery (TOR) and Torentco Asset Management Limited (TAML) has been in the news recently.

There are attempts to insinuate corruption and backroom dealings to sell TOR for US$22 million

Why is the Minister of Energy silent when his sector is being dragged through the mud and why is the Managing Director also silent when his company is being accused of corruption and bribery?

The Institute for Energy Policies and Research (INSTEPR) has been working with TOR since the days of Mr. Isaac Osei through to the Interim Management Committee (IMC) and we know the facts of this process.

We also visited the refinery on various occasions to ascertain the state of the plant. Our recent visit was to the TOR laboratory which needs upgrading since most of the machines in the Laboratory are outdated or does not work.

The institute has done extensive work on this TOR transaction and we would like to put forward the fact as we know it.


In June 2021, the Minister for Energy appointed a three-member Interim Management Committee (IMC) to oversee the affairs of the Refinery as part of government effort to restructure the company.

One of their terms of reference among others was ‘Receiving and assessing viable partnerships for TOR’.

The IMC during their tenure received two (2) proposals from local and international companies.

The companies were Intercontinental Energy-Dubai and Africafinch-Dubai.

The expression of interest drive continued when the new BOD [Board of Directors] took over.

The IMC had reviewed the proposal of Intercontinental Energy and approved it before the new board of directors were sworn in, March 2022.

The new board received a proposal from Decimal Capital and invited all the three companies to do a presentation as reflected in the BOD minutes of 7th April 2022.

The proposal from Decimal Capital received unanimous approval from the new board.

The other proposals required a government guarantee which was not acceptable to the BOD.TOR hired a transaction advisor and a project implementation committee was set up by the management to negotiate the proposal from Decimal Capital.

This negotiation took 6 months and the agreed term sheet was sent to the Ministry of Energy and State Interest and Governance Authority (SIGA) for their approval.

These approvals were given and the terms were to be incorporated in a lease agreement.


Decimal Capital as part of their proposal will incorporate an SPV to sign the lease agreement with TOR.

This practice is very common in corporate transactions. The company Torentco Asset Management Limited was incorporated in January 2023 as the special purpose vehicle.


Tema Oil Refinery has never been a profit making Asset of the country. The historical records will show that the debt of the refinery nearly collapsed Ghana Commercial Bank 20 years ago.

This led to the introduction of TOR Debt Recovery Fund Levy. This fund was enacted into law in 2003, Act 642. In 2003, the TOR debt stood at GH¢450 million.

ACEP in October 2021 put out a report called ‘Plugging the two-decade leak’, to give an insight into the debt and challenges at TOR.

In section 3 of that report, ACEP reported that: ‘Between 2014 and 2018, TOR losses were above GH¢300 million annually, recording the highest in 2014 at GH¢927 million and the least in 2018 at GH¢382 million.

Cumulatively, the total loss over the five-year period amounts to GH¢2.707 billion against the total revenues of GH¢1,263 billion’ Tema Oil Refinery (TOR) made a loss of GH¢1.675 billion according to the 2022 Income Statement of the company.

This is the same company that some so called experts are writing in the media that the company can make US$700 million dollars profit a year.

Currently TOR owes staff pension (SSNIT, TIER 1 &2 ), GRA, Ghana Water, ECG and many other companies. The total TOR debt to date is US$540 million and growing by the day.

The refinery has not refined any crude oil since March 2021, meanwhile the workers are paid every month.


For a refinery that is making monthly losses, the BOD and government approved the following proposal from Torentco:

  1. TAML will pay TOR $1.067 million monthly ($12.8 million yearly) to cover monthly operating expenses (staff remuneration, taxes, statutory debts etc)

  2. TAML will pay the yearly insurance of the refinery $6 million

  3. TAML will make a one-time payment of $22 million to improve and fix the refinery, also $2.5 million to workers Provident Fund.

  4. TAML will pay an annual ground-rent of $1 million in advance for each year.

  5. TAML will reserve 40 US cent per barrel of oil processed for maintenance of plant (estimated at $3.2 million) as well assume the utility cost estimated at US$200,000 every month.

With this proposal to lease the refinery, TOR will still retain it’s current yearly revenue from GPMS dividend estimated at $9 million, Right of way revenue of $2.13 million and laboratory $663,000. This will give TOR a total revenue of $11.793 plus the above payments from TAML.

The refinery will move from a loss-making company to a net positive cashflow of $14.79 million a year while all their bills and financial obligations fully paid. Over the 6 year lease period TOR will receive a total cashflow of $88.7 million with all GRA, ECG, Workers remuneration, Ghana water paid. Plus the one time payment of $22.5 million before the
lease contract starts.

TAML in turn will assume the responsibility of importing 8 million barrels of crude oil a year to be refined at the refinery and the sale of the refined products. Whether TAML makes a loss or profit in their refining and trade of products is not the concern of the Government or TOR.

This proposal was envisaged as a stop gap measure to keep the refinery running for the next 6 years while government looks for a permanent solution.

TAML proposed and agreed that during the 6-year lease, government can terminate the agreement if they find an investment proposal which is long term and better terms than what they proposed.

INSTEPR is of the view that this proposal is the best proposal on the table within the short to medium term.

Government has not stopped any company from expressing interest and to that effect we have sighted a letter dated 18th April 2023 from the Office of the President, asking the Ministry of Energy and TOR to engage a company called Legacy Capital from Dubai.

We always say we want to build Ghanaian wealth and business but the minute a company from Ghana express interest in doing a transaction, all hell breaks loose. You will hear ‘he is politically connected, he does not have capacity, friend with the president family’ etc.

Meanwhile if you check the history and competence of all these companies registered in Dubai, they are empty as well but I guess in Ghana we ask less questions when it’s the white man or the Arab.

The government does not have the $100 million needed to revamp TOR or sovereign guarantee to be given to any company to bring crude oil to TOR. So with the current discussion, we must as well shut the refinery and all workers look for other jobs.

As the refinery stands, it has negative cashflow so any transaction that will bring about positive cashflow is welcoming news.




Source: Graphic


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