Speech By The AG. MD Of TOR At The End Of Year Staff Lunch

The Chairman of the Board of Directors of TOR,

Members of the Board of Directors of TOR,

Representative of the Chief Director of the Ministry of Energy &Petroleum,

Management and Staff of TOR,

Ladies and Gentlemen,

I am delighted to welcome every one of you to our Special programme.  This year’s programme is in two parts- the Festival of Nine Lesson and Carols and the End of Year Staff Lunch in our 50th Anniversary Year.

I do believe you are all expectant of what my message entails.

My message to you this yuletide season is to highlight the state of our refinery, our modest progress, our challenges and the outlook for 2014.

OVERVIEW OF 2013

Now let me give an overview of 2013. We continued to pursue the restructuring agenda which began in 2011 with the implementation of the Plant Stabilization and Profit Enhancement Initiatives. As you are aware the Plant Stabilization Project is aimed at ensuring plant reliability, sustainability and optimization of the processing plants.

State of the Processing Plants

In 2013, our performance regarding crude processing has been below average. This was as a result of inconsistent supply of crude oil. A contract was signed with an Oil Trading Company for the importation of adequate amounts of Atmospheric Residue (AR) to supplement that from the CDU to maximize the utilization of the Residue Fluid Catalytic Cracking Unit

PROGRESS MADE

Indeed, we have made some modest progress. We continued to deliver on our strategy in the face of mounting challenges.

Utilities Improvement – Arrival of the 6.5MW Turbo Steam Generator

Our utilities continue to receive the needed attention in terms of technical improvements as the nerve centre of the refinery’s operations, in order to improve the steam and power generation capacities.

I am happy to report that the 6.5MW new Turbo Steam Generator has finally arrived from its long journey from Canada through America to Ghana.  The Generator is currently, at the Port of Tema awaiting its delivery to the Refinery. The commissioning of the new generator and the increased steam generating levels will bring stability and self-sufficiency in utilities supply for our operations.

Commissioning of the off-Gas Compressor

The off-Gas Compressor installed to reduce consumption and losses in the refinery’s operations is at the commissioning stage, awaiting the arrival of the Contractor from Korea.

Indeed, fuel oil used for the boilers will be processed further to generate additional income to improve upon our bottom line.

Refurbishment of the Premium Reformer Plant

I am also happy to report that the rehabilitation works on the PRF is about 90% complete.

The outstanding jobs are the re-tubing of the heat exchangers and work on this is on-going currently.

You are aware that Management’s decision to rehabilitate this Unit and bring it on stream is to improve the refinery’s economics and its revenue base.

Replacement of the Crude Heater -01-F-61

As you are all aware we have been operating the Crude Distillation Unit (CDU) at 60% capacity since we lost F61, and its replacement has been at the heart of both the Board of Directors and Management.

Ladies and Gentlemen, I am happy to inform you that the new Crude Heater estimated at US$7million has been awarded to VEGA of Italy.

Engineering and fabrication works of the furnace has already begun.  I am informed that, considering the rate at which the Contractor is working, the Crude Heater will be delivered on schedule.

The new F61 will ensure plant reliability and optimization and improve upon our bottom line.

Automatic Tank Gauging System

Ladies and Gentlemen, the Automation of the Storage Tanks is a project very dear to my heart. This is because it will ensure easy monitoring of tank levels, temperatures and volumes to enhance efficiency of our operations.

The new Control room which has been fitted with computerized Tank Gauging System will ensure measurement of stocks and products would also be accurate and reduce human intervention.

Additionally, a systematic programme has been put in place to maintain our storage tanks in a manner that will ensure flexibility in our operations.

The various storage tanks have been awarded for repairs and recalibration. This will ensure integrity of products regarding the handling of third party products.

Preparation for Turnaround Maintenance

In order to improve plant reliability, the major turnaround maintenance has be programme for the 1st quarter of 2014.

I am happy to report that some critical spare parts for the general turnaround maintenance have already arrived at the refinery, while others at the port awaiting clearing. The Maintenance team is putting feverish preparation for execution.

Operational Vehicles

In 2013, we took delivery of ten operational pickups and some buses which have significantly improved the operations of the company.

The branded vehicles have improved the TOR brand, which is good for our image. But I am sure you and I know that we have not gotten there yet; we are on our way and trust that with your support we will get there.

Relationship building with Unions

In order to enhance –management relations, the company in collaboration with the National Unions organized a training programme for the Local  Union executives and Shop Stewards. Subsequently, management staff particularly the line managers will also benefit from similar initiatives.

Challenges

TOR’s challenges continue to be in plant reliability, Utilities Improvement and stabilization, Refinery operations efficiency improvement, lack of working capital which results in interruption in the supply of crude oil.

We continued to suffer the impact of unstable crude oil prices from the world market in 2013, without working capital to procure crude oil on the market when prices are favorable and on continuous basis

Additionally, high interest and funding charges by the various financial institutions also cut deep into our margins. In short it appears we are working hard for the financial institutions.

Discussions and negotiations with various financial institutions including ECOBANK for a facility of US$450- 500 million dollars for crude oil supply to ensure the processing plants ran continuously have not materialized.

We continue to rely on obsolete technology and the old skills we acquired on the job in our operations.

This state of affairs has driven some of our hard working personnel to Oman, Qatar and most recently to companies in Ghana.

This has adversary impacted our operations.  The current difficult financial situation the company faces requires drastic, sustainable and holistic approach to reduce the impact on the processing plants as well as the human capital.

I share in your frustrations. We will turn the situation around. As Victor Hugo said “there is nothing more powerful than an idea whose time has come”

We have all stood by our company even in the difficult times. Your commitment and dedication means a lot to me going forward and I trust I can count on your support

 

OUTLOOK FOR 2014

As we look ahead and focus on the future as a company we have to change course, adapt and reinvent in challenging times, because our success will depend upon it.

Our dear company has potential for change, and as stakeholders we will initiate and drive this.

In 2014, we will rededicate and commit ourselves to safety. Safety shall be our first value. We will place high premium on safety, health, environment, social responsibility and reduce our operating cost.  Safety will be at the very heart of our operations. I will champion the Safety Awareness Drive which begun in 2013.

We want our refinery to be the safest place to work in Ghana and beyond by focusing on safety and safe behavior, because there is no greater value than your life

We will also strive to complete the on-going projects under the Plant Stabilization and Profit Enhancement programme. We will work hard to source for the outstanding US$30million dollars needed to fix the processing plants.

We shall also explore new opportunities for a variety of crude oil and sources by entering into fixed and term contracts with credible crude oil suppliers to guarantee uninterrupted supply. We vigorously pursue and source for AR to ensure the continuous operations of the RFCC.

Our future performance also depends on the successful development and deployment of new technologies in every area of our operations. In the industry we operate technology is changing by the day and we need to keep pace in order to improve our efficiency.

Process Review of CDU

Looking further ahead, we have finalized the study for the process review of the Crude Distillation Unit to increase the capacity from 45,000 barrels per stream day to between 60,000 and 80,000 bpsd. But the realization of this project will depend on the availability of financing.

The feasibility study for the construction of the Stand-alone 120,000 bpsd Crude Distillation Unit refinery has been completed.

We are constrained by capital and therefore are looking for investors for the Stand Alone refinery which will be export-oriented.

Strategic partnership

We are aware and continue to pay attention to the long term strategic view of the shareholder and welcome any strategic investor who will partner TOR to make it profitable.

Harnessing and maximizing the capabilities of our human capital is critical for both the short and long term success and growth of TOR.  In 2014, we will focus on structured training in technical/functional competencies at all levels at the organization.  Performance management and retention strategies will be high on our agenda for 2014.

In addition, succession planning will be given the needed attention in order to enhance our bench strength.  We have already started automation of our Human Resource Systems and we trust that this will go a long way to improve work flow and management of HR data/benefits.

Indeed we need to redouble our efforts and draw on our full potential.

We have to act with determination, commitment and speed in whatever tasks we are assigned.

I believe in you and your ability to rise to the occasion. With your support, dedication I know we can achieve and make TOR a wonderful place to work.

A company which does not honour its hard working staff is not worth serving. We have in our midst staff who retired in 2013. Some of them worked for over 35 years.  We appreciate your contribution and have some mementoes to show our appreciation and recognition of your hard work.

We are a family.

Thank you and enjoy the programme.