Tema Oil Refinery’s Equity Plummets by 135%, Now Valued at GH¢5.7 Billion

The Tema Oil Refinery (TOR), Ghana‘s premier petroleum processing facility, is in deep financial crisis, with its equity plummeting from GH¢2.4 billion in 2019 to a deficit of GH¢5.7 billion in 2023.

This 135% downturn raises serious concerns about the refinery’s financial health and future viability.

The alarming figures, revealed by the Centre for Environmental Management and Sustainable Energy (CEMSE) on January 23, 2025, shed light on the structural inefficiencies and persistent losses plaguing TOR, which has historically been a cornerstone of Ghana’s energy sector.

TOR’s financial struggles have been evident since 2019, with average annual losses of GH¢793 million. Net losses reached GH¢1.6 billion in 2022 and GH¢1.3 billion in 2023, reflecting a consistent decline in profitability and negative returns on assets.

Despite its expansion from a tolling refinery under its original Ghanaian Italian Petroleum Company (GHAIP) framework to a multifaceted operation that includes importation, storage, and distribution of petroleum products, TOR has failed to achieve financial stability.

One of TOR’s critical challenges is overstaffing. The refinery employs over 750 workers, far exceeding the 150 personnel required for optimal operations. This inefficiency has further strained its already precarious financial position, prompting calls for immediate workforce restructuring.

CEMSE has proposed three options to address TOR’s deteriorating situation including filing for bankruptcy. A court-supervised bankruptcy process, they argued, could allow TOR to restructure its operations, renegotiate debts, and rationalize its workforce while preventing further financial losses.

Alternatively, they said the government could stabilize TOR through a targeted liquidity injection and explore debt restructuring mechanisms, such as debt-for-equity swaps, to improve governance and asset management.

Also, they recommended engaging private sector operators through concession agreements. This they said could bring in capital and expertise to enhance TOR’s efficiency while retaining state ownership. Rigorous oversight would be critical to safeguard public interests.

TOR’s future is crucial to Ghana’s energy security and broader economic stability. However, its ongoing financial decline and operational inefficiencies pose significant risks.