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TOR board swings on transparency after OSP directive

Business

7 months ago
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The Board of Directors of the Tema Oil Refinery (TOR) has expressed its commitment to transparency and accountability in their decision-making process to help bring the state’s refinery back to full time operation.

In a six-page statement to the media, the board members also expressed their willingness to engage with alternative prospective investors to help revive the company.

This is after the Office of the Special Prosecutor (OSP) has directed the management of TOR to suspend its proposed partnership agreement with Tema Energy and Processing Limited (TEPL).

The OSP, in a letter dated November 21, 2023, and addressed to the Managing Director of TOR, Daniel Osei Appiah, said “It has commenced an analysis of the risk of corruption in respect of the proposed partnership.”

“You are directed to immediately suspend the proposed partnership agreement, ongoing negotiations, operations and all other ancillary activities arising out of and consequent upon the proposed partnership agreement until you are otherwise advised by the Special Prosecutor.”

The directive of the Special Prosecutor follows agitations of the workers of TOR who expressed their opposition to the partnership deal with Torentco Asset Management Limited now Tema Energy and Processing Limited.

On Monday, November 20, the General Transport, Petroleum, and Chemical Workers Union of the Trades Union Congress (TUC) Ghana petitioned the Special Prosecutor to investigate the lease agreement between the Tema Oil Refinery and Torentco Asset Management Limited.

High standards

But the board, in response to the directive by the Office of the Special Prosecutor, said it was committed to maintaining high standards of integrity, ethics, and governance, and their willingness to cooperate with the Office of the Special Prosecutor and the Attorney General to ensure a better understanding of the proposed transaction.

They believe that the project has the potential to benefit TOR and its workers and are focused on creating a thriving work environment and uplifting staff morale.

It said the board had negotiated the right to terminate the proposed lease agreement with TEPL if necessary and was willing to engage with alternative prospective investors.

It said there were several conditions precedent that needed to be completed before the lease agreement could be finalised, including upfront payment by TEPL, approval of the NPA Refiner Licence, approval of the transaction by TOR stakeholders, and completion of the final due diligence report.

Disappointment

The board also expressed disappointment in the actions of the GTPCWU leaders, who, it said, made baseless allegations without engaging with management or the board to ascertain the facts.

It added that the board and management would conduct an internal process to understand and address this behaviour.

Details

Explaining the details of the issue, it said the TOR Rehabilitation Project was tasked to the board with the aim of securing a credible solution to return TOR to sustained and profitable refining activity.

“The refinery has not processed a barrel of oil since April 2021 and has been reliant on government funding to cover cash flow shortfalls.

The proposed rehabilitation project aimed to restore the infrastructure at the refinery and ensure sustainable profitability,” it stated.

It added that the board, which comprised reputable and experienced individuals, held over 40 board meetings since its inauguration in March 2022, with the determination to find a robust and sustainable solution for TOR.

“The financial health of TOR has been challenged for years, leading to stagnant salaries for employees and the exit of key engineering skills.

The board and management are committed to overcoming these challenges and setting TOR on a path to sustained recovery,” it stated.

It said due to the financial position of the company, the management of TOR approached several prospective investors to participate in a competitive tender for the rehabilitation project.

source: Graphiconline.com