Government to audit energy sector debts as TOR pushes for ESLA receivables

The Minister Responsible for Energy and Green Transition, Dr John Abdulai Jinapor, has disclosed that his outfit is in discussions with the Ministry of Finance to commission a comprehensive audit of state energy sector agencies’ balance sheets.

The move, he said, is with an aim of identifying and stripping out government-related debt that is constraining their ability to raise commercial financing.

Speaking at the 18th annual general meeting of Tema Oil Refinery (TOR) Limited, Jinapor said an impaired balance sheet makes it difficult for state energy entities to access financing and that the planned audit will help isolate liabilities arising from government’s side so they can be taken off agencies’ books.

“What we want to do is to look at the debts, particularly arising from the government side, so that we can reduce it, take them off your balance sheet,” he said.

A cleaner balance sheet will position TOR to “go to the markets and raise finance” he noted, at a time when the cost of borrowing has fallen significantly on the back of macroeconomic stability and disinflation.

TOR’s US$517m legacy debt

The minister’s remarks responded directly to an appeal made earlier in the meeting by TOR Board Chairman, Nayon Bilijo, who disclosed that the company inherited a legacy debt portfolio of approximately US$517million when the current Board was inaugurated in July 2025 – arising largely from statutory obligations, trade liabilities and unresolved claims.

Bilijo itemised the exposure as US$97million owed to government, US$58million to Ghana National Petroleum Commission (GNPC), US$78.9million to Volta River Authority (VRA), US$128million to Sahara Oil, and US$41million to BP.

“These debts, though inherited, continue to serve as stark reminders of past activities and have implications for the present,” he remarked.

Bilijo said that through the Energy Sector Levy Act (ESLA), approximately GH¢3.4billion has been collected on TOR’s behalf – of which GH¢1.47billion has already been applied against the company’s debt.

“We strongly appeal to government through the Ministry of Finance to help restructure these debts by applying TOR’s margin in the ESLA receivables to settle them,” he said.

Managing Director, Edmond Kombat, reinforced the appeal in his own review, disclosing that TOR is still owed a minimum of GH¢1.6billion in ESLA receivables from the finance ministry.

“I have initiated those conversations and I am determined to see them through,” he noted.

Balance sheet position

TOR’s total debt stood at GH¢2.33billion as of December 31, 2025, down 13 percent from GH¢2.62billion in 2024 – comprising GH¢695.5million in long-term borrowings and GH¢1.632billion in short-term borrowings.

Long-term borrowings alone fell from GH¢957.2million to GH¢695.5million during the year, a reduction of 27 percent.

“Lenders have reduced their exposure by 27 percent, which we regard as a vote of confidence in the company’s direction,” Kombat said.

Trade and other payables decreased from GH¢7.12billion in 2024 to GH¢5.52billion in 2025, a fall of GH¢1.61billion or 22.5 percent. Total assets at year-end stood at GH¢3.44billion against total equity of negative GH¢4.53billion.

“The negative equity position reflects accumulated losses of prior years and remains the most important financial challenge facing the company over the medium-term,” Kombat explained.

The accumulated retained deficit narrowed from GH¢8.962billion at start of the year to GH¢7.869billion by year-end.

Six-year audit backlog cleared

The balance sheet disclosures came as TOR presented audited financial statements covering financial years 2017 through 2025 at the same meeting, closing a six-year audit backlog that had left the company without published financials from 2019 to 2024.

Kombat described the backlog as “not a single administrative failure but a systemic collapse in financial governance”.

He said all six backlog years were audited and finalised by April 30, 2026, with the 2025 accounts completed and audited by May 30, 2026 – bringing the total to seven sets of audited financial statements presented to the State Interests and Governance Authority (SIGA) in a single exercise.

Jinapor commended TOR’s leadership for the turnaround, singling out Kombat for praise and describingd his tenure as “one hundred over one hundred”.

The minister said the company’s nine-year inability to publish financials had signalled that it was “actually dead”, but the current management had proven leadership can “turn around a situation that looks and sounds insurmountable”.

Operations and capacity expansion

TOR’s Board Chair said turnaround maintenance on the Crude Distillation Unit (CDU) has been completed, with the unit processing approximately 600,000 barrels of crude oil in December 2025.

The Residue Fluid Catalytic Cracking (RFCC) unit remains under turnaround maintenance and is expected to come onstream in July 2026.

The CDU is currently processing at 28,000 barrels per stream day (bpsd); a second furnace under construction by foreign engineers is expected to raise this to approximately 45,000 bpsd, while completion of the RFCC is expected to lift capacity further to 65,000 bpsd.

TOR also has a crude supply agreement covering approximately one million barrels of crude oil per month for the next two years, with management estimating that every one million barrels processed generates between US$4million and US$6million in receivables for the company.

Revenue and profit

Revenue grew 18.2 percent to GH¢285.9million in 2025 from GH¢241.8million in 2024, the strongest performance in the ten-year period from 2016 to 2025.

Cost of sales rose from GH¢21million to GH¢66.6million, reflecting the resumption of refining activity, while gross profit of GH¢219.2million was achieved at a gross margin of 76.8 percent – down from 91.3 percent in 2024.

General and administrative expenses rose 27.3 percent to GH¢346.5million, which management attributed to staff recruitment and turnaround maintenance costs. Mr. Kombat noted that at the commencement of his tenure a significant chunk of the refinery’s skilled labour were over 45, with many seeking better terms in the Middle East and Dangote Refinery.

The company posted a foreign exchange gain of GH¢1.38billion against a foreign exchange loss of GH¢981.5million in 2024, which, Kombat said was the primary driver of the year’s profit before tax at GH¢1.42billion.

After a tax charge of GH¢322million, profit after tax stood at GH¢1.1billion – the company’s first profit in a decade following nine consecutive years of losses totalling GH¢6.08billion between 2016 and 2024. The Board did not declare a dividend, citing the company’s accumulated deficit.

Staffing and infrastructure

Receivable days improved from 1,099 in 2024 to 652 in 2025, an improvement of 447 days. Staff numbers, which had fallen to 547 in 2024, have been rebuilt to 1,144.

Bilijo said TOR inherited 17 storage tanks that were out of service and are currently undergoing repairs, while the company’s loading gantry is being automated to raise its loading rate from approximately 8 million litres in 24 hours to the same volume in 8 hours – a 33 percent increase in efficiency.

He said a fully operational refinery will reduce Ghana’s foreign exchange expenditure on imported petroleum products, currently estimated at approximately US$400million monthly.

Prince Antwi

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