ECOBANK GUARANTEES LCS FOR OIL DELIVERY (PAGE 3, OCT 28)

ECOBANK Ghana Limited has raised $54 million worth of letters of credit (LCs) to enable the Tema Oil Refinery (TOR) to take delivery of 997,000 barrels of crude oil for refining.
The refinery may, however, have to wait till the end of today, by which time Sahara Energy in Nigeria is expected to have received confirmation of receipt of payment.
The consignment of crude has been on anchorage at the Tema Harbour since Monday waiting to berth at the Single Point Mooring (SPM) facility near Kpone for onward delivery, while the consignee agency, Sahara Energy, demands LCs that will serve as guarantee that it will be paid for the delivery.
Attempts by the government and TOR on Monday to get Ghana Commercial Bank (GCB) to provide the needed guarantee failed because the refinery was already indebted to GCB to the tune of some $600 million and the new guarantee would raise the level of indebtedness further to undesirable limits.
Daily Graphic sources disclosed that ECOBANK, after a hectic meeting with officials of the Finance and Energy ministries, as well as TOR, yesterday, agreed to provide the LCs to cover more than 80 per cent of the cargo.
The sources added that owing to the level of the transaction, the Bank of Ghana (BoG) had to grant the guaranteeing agency ECOBANK an exemption before it could agree on the deal as part of the conditions spelt out in the contract.
They further indicated that TOR needed to put its documents in order following a formal request for the LCs late on Monday afternoon after GCB had failed to raise the LCs.
ECOBANK Ghana and its parent company, ECOBANK Development Corporation (EDC), were in June this year contracted by the government to restructure TOR’s debt to enable it to recommence regular operations.
The absence of crude oil since September last year has led to agitation among TOR’s workers who threatened to embark on an industrial action if the President did not step in to save the situation.
The agitation also saw the workers accusing some officials of the Energy Ministry of subverting the importation of crude oil, leading to an artificial shortage of petroleum products, because of the huge profit margins they were generating from the importation of finished petroleum products for TOR.
Officials of TOR, as well as the representing ministries brokering the deal, are tight-lipped over the latest development, as calls to their phones went unanswered.