Ghana oil refinery’s debt woes in the past

TEMA – Ghana’s only oil refinery, virtually shuttered since February due to a big debt burden, will restart tomorrow and stay running, the plant’s director said yesterday.

A financial restructuring exercise initiated by the government to offset the 45 000 barrel per day Tema refinery’s debts has rekindled confidence among creditors and enabled it to line up steady crude supply.’Certain banks are already coming forward – a lot more will follow because the outlook is bright,’ Managing Director Kwame Ampofo told Reuters in an interview.State-run Tema owed roughly US$600 million to Ghana Commercial Bank and other service providers, including oil companies, leaving it unable to buy oil last December and forcing it to shut down for a lack of feedstock in February.Workers have threatened to sabotage the plant if it did not quickly procure oil and restart.The refinery last week acquired its first shipment of crude oil since December, 950 000 barrels from Nigeria, thanks to letters of credit provided by the Ghana branch of Ecobank, Ampofo said.The spot-market purchase came after the government last month appointed Pan-Africa bank Ecobank to help arrange a US$600 million syndicated facility to refinance half the debt owed to Ghana Commercial Bank and to use the rest to strengthen the refinery’s balance sheet.Ampofo said while the refinery had yet to complete its recapitalisation, confidence in the plant’s potential profitability had improved.’Things are different now because the investors have seen Tema Oil Refinery’s great potentials again and are ready to support it with letters of credit for crude,’ he said.He added the refinery would continue to buy the bulk of its crude oil from the spot market until January, when government-to-government supply deals with Nigeria, Libya and Sudan kick in.Ghana, world no.2 cocoa producer after Ivory Coast, is due to begin producing crude oil in late 2010.- Nampa-Reuters