Plugging The Two-Decade Leak: Strategic Options for the Sustainability of Tema Oil Refinery

The Tema Oil Refinery (TOR) has a refinery capacity of 45,000barrels per stream day (bpsd) and remains a major refinery of crude oil in Ghana. The refinery was constructed in 1963 and was 100 percent owned by ENI as Ghanaian Italian Petroleum (GHAIP) Limited, a tolling refinery to process crude oil from multinational companies into finished petroleum products at a fee. In 1977, the company was acquired by the government of Ghana and continued to operate as a tolling facility until 1996, when its business strategy changed to integrate upwards. This change allowed TOR to procure its own crude and market refined products to recover the cost of the crude, refining and operating margins.

The extended business exposed the company to both political and market risks. These risks largely emanated from price regulation and excessive interference from the government, which led to the accumulation of debt over the years.