OSP and AG Halt TOR Lease Agreement With Torentco

The Attorney General and Minister of Justice, Godfred Yeboah Dame, has intervened to halt the proposed lease of the state-owned Tema Oil Refinery (TOR) to Torentco Asset Management Limited (TAML). This move follows the submission of a Due Diligence Report (DDR) by the General Transport, Petroleum, and Chemical Workers Union of the Trades Union Congress (TUC) of Ghana, pressing for a reassessment of Torentco’s credibility.

The General Transport, Petroleum, and Chemical Workers Union celebrated the directive from the Office of the Special Prosecutor (OSP) to suspend TOR's proposed partnership agreement with Tema Energy and Processing Limited (TEPL). They voiced concerns about the dubious nature of the lease agreement between TOR and Torentco Asset Management Limited and expressed confidence that an investigation by the OSP would reveal significant irregularities.

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This recent development comes in the wake of previous apprehensions raised by the Africa Center for Energy Policy (ACEP) and IMANI Ghana regarding the negotiations of the lease agreement between Torentco and TOR. Moreover, claims emerged that the Energy Minister, Dr. Matthew Opoku Prempeh, and Nana Bediatuo Asante, a cousin of President Nana Akufo-Addo and his Executive Secretary, were entangled in negotiations over TOR, a state facility. Torentco, reportedly associated with Nana Bediatuo, is alleged to be on the verge of acquiring the state facility at minimal cost, despite lacking a substantial track record in the petroleum business.

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In response to the Workers Union's petition, the Attorney General highlighted TAML's lack of financial and technical capacity to undertake the proposed transaction. The DDR indicated that TAML had no established affiliation with Vitol or any other company possessing the necessary funds and technical expertise essential for executing the lease. Furthermore, it was revealed that TAML lacked the requisite licenses and documentation to proceed with the lease agreement, contravening legal stipulations.

As the Union requested the intervention of the Special Prosecutor to investigate the ongoing lease arrangement, the conflicting claims and potential conflicts of interest have come into focus. The TOR Workers Charity Trust, purportedly established to represent workers' interests, has been challenged for its legitimacy, drawing attention to potential misrepresentations and alleged attempts to secure shares through undisclosed means.

The National Chairman of the Workers Union emphasized concerns of corruption and conflict of interest, underscoring the need for a deeper investigation to unveil the opaque nature of the dealing. It is also claimed that Torentco, a newly formed Ghanaian company, lacks the necessary track record and capacity to effectively manage TOR.

IMANI Africa, a policy think tank, has asserted that the Tema Oil Refinery (TOR) sought approval from Ghana’s Public Procurement Authority (PPA) to lease its key production assets to Torentco Asset Management. This intended lease would grant Torentco control over TOR's core refining business for a duration of six years.

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According to IMANI Africa, Torentco is permitted to refine up to 8 million barrels of oil annually, with an annual rent payment of $1 million. Additionally, an "additional rent" of $1.067 million monthly is stipulated. Boakye Kwabena Boakye of the Africa Center for Energy Policy (ACEP) voiced concerns about Torentco, an indigenous Ghanaian company formed in January 2023, lacking a verifiable track record in the petroleum industry. He emphasized the need for transparency and a competitive bidding process to ensure the selection of the most suitable option. He highlighted the importance of open bidding to gauge interest and secure the best possible deal, urging a public process that could be scrutinized and endorsed by the populace.

Despite these concerns, the Senior Staff Union of TOR defended Torentco as the sole viable option to revitalize the refinery, citing governmental reluctance to invest in its operations. The proposed lease agreement outlines a commitment from Torentco Asset Management Group to pay $22 million to operate the refinery over six years, with provisions for refining up to 8 million barrels annually. IMANI Africa highlighted an "additional rent" clause that imposes extra charges if Torentco surpasses the 8 million-barrel limit. This scrutiny by IMANI Africa suggests a potential substantial financial burden on Torentco should they push production beyond the stipulated threshold.

Torentco's investment encompasses a $22 million expenditure to overhaul the refinery, and it assumes responsibility for settling provident fund arrears amounting to $2.5 million. Furthermore, Torentco will establish a reserve fund and allocate funds for maintenance expenses per barrel refined, in addition to shouldering insurance and utility payments.

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SOURCE:

-GHANA WEB- "Special Prosecutor, A-G Scatter Asante Bediatuo’s Torentco Deal At TOR"