The Tema Oil Refinery (TOR), once a cornerstone of Ghana’s petroleum industry, is facing an unprecedented financial and operational crisis.
With mounting losses and a ballooning debt portfolio, urgent measures are being proposed to save the company from collapse.
According to a report from the Center for Energy Management and Sustainable Environment (CEMSE), TOR’s financial health has been on a steep decline since 2019.
“In 2019, TOR recorded negative equity of GH¢2.4 billion, which worsened to GH¢5.7 billion by 2023,” the report stated.
This 135% deterioration highlights the scale of the crisis, with the refinery losing an average of GH¢823 million annually in equity value.
The report also revealed that the Tema Oil Refinery has been operating at a significant net loss since 2019, peaking at GH¢1.6 billion in 2022.
These losses reflect poor financial and operational management, leaving the refinery in dire need of intervention. Adding to its woes, TOR’s workforce of over 750 employees is said to be grossly inflated, with experts suggesting that only 150 workers are required to efficiently manage operations.
“This is a textbook case of inefficiency and financial mismanagement,” said a representative from CEMSE. “For a company in such financial distress to maintain such a bloated workforce is unsustainable. Immediate action is necessary.”
To address the crisis, CEMSE proposed three key recommendations:
- Filing for Bankruptcy
Filing for bankruptcy could allow TOR to reorganize under court supervision, restructuring its debts and streamlining its operations. “This would provide an opportunity to rationalize payroll costs and temporarily halt operations while addressing financial inefficiencies,” the report suggested. - Restructuring with Liquidity Injection
A government-led restructuring effort, coupled with negotiated debt extensions or debt-for-equity swaps, could attract private sector expertise and investments. This approach aims to improve asset management and operational efficiency. “It’s time to explore partnerships that bring in technical and managerial expertise,” the CEMSE representative added. - Concession Agreements
Granting private entities the right to invest in and operate TOR’s infrastructure under a concession agreement was another proposed solution. This model would ensure private sector efficiency while retaining public ownership. “However, such agreements must be carefully designed to balance public and private interests,” CEMSE emphasized.
The recommendations have sparked debate among stakeholders, with many agreeing on the urgency for reform.
“Tema Oil Refinery is a national asset, and we cannot allow it to collapse. We must explore innovative solutions,” said an energy analyst who wished to remain anonymous.
As Ghana’s government grapples with limited fiscal space, the future of TOR hangs in the balance. The question remains whether these recommendations will be heeded to rescue the refinery and secure its role in the country’s energy landscape.
