CEMSE calls for partnership-based approach to revive Tema Oil Refinery
By Praisebell Rosemond Larbi
The Centre for Environmental Management and Sustainable Energy (CEMSE) has urged government and industry stakeholders to adopt a partnership-based approach to reviving the Tema Oil Refinery (TOR), emphasising that a tolling model offers the most viable and sustainable path to restore the refinery’s operations and financial health.
In a policy statement titled ‘Direct and Action-Oriented: How a Tolling Deal, Not a Sale, Can Revive Ghana’s Tema Oil Refinery,’ the organisation said TOR’s recent performance demonstrates its ability to generate consistent revenue when its assets are efficiently managed.
CEMSE cited data showing that the refinery earned about USD21 million from terminal operations in the past year, a sign that strategic asset use can yield significant returns. The group credited both the previous and current TOR boards for maintaining initiatives that have diversified the refinery’s income base and prevented a total shutdown.
Among these measures were a take-or-pay storage agreement with Sentuo Oil Refinery guaranteeing TOR an estimated USD2 million in monthly revenue, as well as new revenue streams from loading rack fees, pipeline right-of-way charges, and dividends from the Ghana Petroleum Mooring System (GPMS).
“These measures repositioned TOR as a diversified petroleum logistics hub. Continuity in management strategy has been crucial to keeping the refinery financially afloat,” said Benjamin Nsiah, Executive Director of CEMSE.
However, the think tank stressed that long-term sustainability requires restarting TOR’s core refining operations through a model that shields government from crude procurement risks and international oil price volatility.
According to CEMSE, the tolling arrangement, where private partners provide crude oil and absorb market risks while TOR processes it for a fixed fee, offers the best solution.
Citing global research by McKinsey & Company, CEMSE stated that tolling deals “provide a stable, low-risk revenue base for refinery owners” and safeguard national assets from speculative exposure.
It pointed to the proposed Netoil Energy Limited partnership, which involves a USD214 million capital investment and a guaranteed USD1.50 per barrel processing fee for a minimum of 12 million barrels per year, as a “lifeline, not a sale.”
“The tolling model transforms TOR’s revenue stream from unpredictable and speculative to guaranteed and sustainable. The Government of Ghana retains full ownership of the refinery, with no fiscal exposure or sovereign guarantees required,” Mr Nsiah explained.
CEMSE estimated that successful implementation of such a partnership could save Ghana over USD2 billion in foreign exchange, stabilise the cedi, and enhance national fuel security.
“The future of TOR lies not in political point-scoring or outright divestment, but in pragmatic collaboration that safeguards national interests while leveraging global expertise,” Mr Nsiah added.
