The Tema Oil Refinery (TOR) is entering into a strategic partnership with Saudi Aramco of the Kingdom of Saudi Arabia that will see TOR refining more than 60,000 barrels of crude oil daily.
The Head of Energy, Oil and Gas Unit of the Ministry of Finance, Dr Joseph Kwadwo Asenso, who made this known, said the discussion between TOR and Saudi Aramco was at the final stage.
He was, however, unable to say when the discussion would be concluded or when the project would take off.
Dr Asenso was presenting a paper on “The Upstream Petroleum Sector: the Challenges and Prospects” at a seminar on development economics in Accra on Thursday.
It was organised by the Economy of Ghana Network (EGN) of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana.
Saudi Aramco, officially the Saudi Arabian Oil Company, most popularly known as Aramco, is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia.
Dr Asenso said the plan was to get TOR to a level where it would become self-sufficient; not to rely on government subvention every now and then. “Now TOR is in a discussion with Saudi Aramco to help get us there. It has not been finalised so I cannot tell when they will come on board. But discussions are ongoing,” he said.
Dr Asenso said the current refinery capacity of TOR was 45,000 barrels per day, and indicated that: “We are targeting 60,000 a day and beyond.”
He said the increased refinery of crude oil by TOR would create jobs and save the government from the burden of giving subvention to TOR.
Dr Asenso said revenue from the oil sector supported the country’s economy. However, he said, Ghana had not reached a stage where the country would be solely dependent on oil revenue.
For instance, Dr Asenso said of the 102,000 barrels produced daily by oil companies in Ghana, the country got only 17 per cent from the oil produced with the exclusion of corporate taxes. He said the drop in the price of oil had reduced the estimated oil revenue for 2015 significantly.
A Senior Research Fellow at ISSER, Dr Robert Darko Osei, said if the divergence between government revenue and expenditure continued to widen, there would be more pressure on the exchange rate.
He warned that if such a pressure continued, people would invest outside the manufacturing and agriculture sectors. Dr Osei, therefore, asked the government to control its expenditure, saying: “We need to nip the divergence between revenue and expenditure in the bud.”