 |
| Energy Minister, Kofi Armah Buah |
OVER the past few decades, successive governments have tried to improve the country’s energy sector.
Millions of cedis have been spent, but little has been achieved.
The problems we face today are testimonies of the inadequacy of legislation and policies and these are the strongest possible signals that Ghana needs to adopt a radical approach to find solutions for the problems in the energy sector.
While admitting that the high capital intensive nature of the sector has contributed to the minimal growth, public sector funding has been inadequate for the maintenance of current systems and the development of new energy sources.
For instance, while infrastructure on electricity generation continues to be dependent on thermal power generation, activities in the petroleum sector are being hampered by the absence of legislation.
The new Petroleum Exploration Law to replace the Ghana National Petroleum Corporation (GNPC) Exploration and Production Law, PNDC Law 84 of 1983 is yet to be put in place to take cognisance of current activities, three years into production.
According to Dr Steve Manteaw of the Integrated Social Development Centre (ISODEC), while the necessary infrastructure for gas harvesting are still not available, the delay in putting in place the necessary legislation for an effective handling of the sector might end up short-changing the citizenry.
Tema Oil Refinery’s (TOR) role in the economy in the last four years can be described as unsatisfactory, due to the company’s increasing operational cost, making it less competitive.
Many are of the view that while TOR has over the years become a dumping ground for political foot-soldiers and activists, pilfering, stealing and inefficiency can also not be ruled out.
In the view of Dr Manteaw, the refinery’s existence is vital and bottlenecks must be addressed.
While government in December 2012 released $30 million to TOR towards its plant stabilisation process, the challenges facing the refinery may require a capital injection of over $500 million, following the long neglect over the last four years by the sole shareholder.
The capital injection can allow for plant configuration as cost cutting measures, since TOR currently processes Sweet Light Crude oil, which is one of the expensive crudes on the market.
Such measures would require the need to put in place desalters to remove salt and sulphur from the crude oil before processing.
In doing so, Isomerisation and Alkylation plants also need to be considered to improve on the company’s heavy naphtha feed to produce high octane gasoline and Liquefied Petroleum Gas (LPG).
One other challenge, which is an albatross around the neck of TOR for the last four years, has been its inability to raise letters of credit (LCs) to purchase crude oil.
The period also saw the erratic shutdown of the refinery’s Residual Fluid Catalytic Cracker (RFCC) and Crude Distillation Units (CDU).
An LC waiver regime that existed between 2001-2008 was withdrawn because of government’s attempts to turn TOR into a tolling facility, while the government hid under the cloak of the infamous TOR debt.
Can government alone take the blame? How about the refinery’s management’s inability to ensure profitability?
Do managers see the need to have in place a proper trading desk where they could monitor and predict the prices of petroleum products within the various trading windows?
With the Ministry of Energy being reviewed to have petroleum as a major component, what defining role will TOR play in this venture?
Will the incoming Minister, Mr Kofi-Armah Buah, who had previously supervised the petroleum sector at the same ministry extend the needed assistance to TOR’s profitability to ensure its competitiveness?
How about processing the Jubilee crude oil, which experts say has the same properties of Bonny or Brent?
President John Mahama on December 4, 2012 promised that his government would put the necessary measures in place to enable TOR operate at full capacity.
Perhaps, government’s decision to release the paltry $30 million could be a result of the President’s campaign promise which came back haunting officials who were variously accused by Ghanaians of attempting to rundown TOR so it could be disposed off.
Beyond the lip service, will the refocussed Ministry of Energy and Petroleum strengthen the energy sector regulation to reflect the market prices being paid by consumers of energy commodities?
What about legislation and legal frameworks that industry players and the general public have been crying for?
With load shedding on the increase and the Bui Dam Project (designed to generate some 400 megawatts of power to augment the country's debilitating energy shortfall) at a standstill, will the Ghanaian consumer see light at the end of the tunnel?
Mr Kofi-Armah Buah, the ball is in your court.
No comments:
Post a Comment