As global energy markets face renewed volatility emanating from the escalating tension between Israel and Iran, some experts in Ghana’s energy space are championing the call for the government to revive the “dormant” Tema Oil Refinery (TOR).
The proponents of this call believe an operational TOR will be very crucial in shielding the economy from the shocks since the country will be refining its own crude.
This means, with the country being an oil producer, refining its own crude could insulate the country from supply chain shocks that can come from external developments.
Although there’s a campaign calling on the government to invest in TOR, former Minister for Power, Dr. Kwabena Donkor, believes the approach is not a straight-jacket solution.
Contractual Obligations
Without downplaying the solution, he believes there are nuances that must be considered as part of this approach.
In an exclusive interview with The High Street Journal, the former Member of Parliament for Pru East maintained that the approach must also consider the supply to TOR if it’s made operational.
Dr. Donkor says the approach, while well-intentioned, oversimplifies the legal and contractual realities of Ghana’s oil production structure. He explains that Ghana cannot simply compel oil partners to redirect crude for domestic use without respecting existing contracts and procedures laid out in Act 919, the Petroleum (Exploration and Production) Act.
He maintains that the government must give prior notice and ample time to readjust their contracts to be able to service the domestic need by TOR.
“That argument is not necessarily the right argument,” he remarked, adding that, “if you look at Act 919, which is the exploration and production law, we have what we call domestic supply obligations. To kick in the domestic supply obligations, you need to notify the partners and give them ample time because they have contracts in order to readjust the contracts.”
A Smarter Option: Sell Ghana’s Share to TOR and Sentuo
Rather than disrupt international contracts, Dr. Donkor proposes a more practical and strategic path, which is selling Ghana’s share of crude oil, held by the Ghana National Petroleum Corporation (GNPC) on behalf of the state, directly to domestic refiners like TOR and the privately-run Sentuo Refinery.
“That we can do easily,” he stressed. “We can sell GNPC’s receipts to TOR and Sentuo for refining domestically.”
This approach would ensure Ghana continues to honour its international obligations while still increasing the share of locally refined petroleum products. This move, he is convinced, could be critical toward reducing reliance on imports, improving energy security, and managing foreign exchange pressures.
Payment Reliability & Petroleum Fund Safeguards
Dr. Donkor, however, warned that this option only works if accompanied by strong financial mechanisms to guarantee timely payments. He cited a previous attempt by GNPC to sell crude to TOR, which stalled due to TOR’s failure to honour payment obligations.
“GNPC tried once, and payment became an issue with TOR,” he recalled. “If we are to do that again, then measures must be in place to ensure that the revenue gets into the Petroleum Funds.”
This is crucial not just for operational success, but also for preserving fiscal transparency and accountability, in line with the Public Financial Management Act and the Petroleum Revenue Management Act.
Balancing Legal Reality with Strategic Ambition
Dr. Donkor’s approach reflects a nuanced but forward-looking strategy that does not sidestep contracts or laws. The former minister believes Ghana can leverage its equity in the crude oil to supply domestic refiners under well-structured commercial terms.
The energy expert argues that Ghana’s quest for energy security amid global threats cannot be built on shortcuts. It must be anchored in law, financial integrity, and strategic foresight. Selling Ghana’s share of crude to TOR and Sentuo is not only lawful, he says, it is doable. But it must be done right.
