The Tema Oil Refinery (TOR) in Ghana is poised to ease its debt burden with a $120 million debt write-off by the Finance Ministry. According to TOR's Managing Director, Edmond Kombat, the government has agreed to write off part of the refinery's outstanding $400 million debt. This move aims to further alleviate the financial strain on the state-owned refinery. The debt write-off is part of efforts to revive the refinery, which has faced significant challenges in recent years.
TOR's debt crisis stems from years of shutdowns, poor maintenance, political interference, and mismanaged levies. The refinery owes hundreds of millions of dollars to both private and state creditors. The outstanding legacy debt is comprised of five major obligations owed to different creditors, including private companies such as Sahara and BP, as well as state institutions like the Ghana National Petroleum Corporation (GNPC) and the Volta River Authority (VRA).
The initial debt restructuring exercise significantly reduced TOR's historical liabilities from an initial amount to $400 million. The Finance Ministry's proposed debt write-off of $120 million will further bring down the debt. This development could ease some of the financial pressure on the refinery, allowing it to focus on operational efficiency and meeting its financial obligations.
TOR resumed refining operations on December 19, 2025, after several years of shutdown. The refinery restarted at a capacity of about 28,000 barrels per stream day (bpsd), with plans to gradually ramp up production to between 45,000 and 85,000 bpsd over the next 18 months. By the end of August 2026, TOR had processed approximately 2.5 million barrels of crude oil, producing over 382 million litres of petroleum products for the Ghanaian market.
A significant milestone in TOR's revival efforts was the successful commissioning of the F-61 Crude Distillation Unit furnace on August 1, 2026. This restored the refinery's core processing capacity and signalled its ability to sustain operations after years of inactivity. The refinery's revival is crucial for Ghana's energy sector, as it aims to reduce reliance on imported petroleum products.
Negotiations with private creditors could be more challenging, but management is exploring the possibility of securing discounts on the amounts owed. For TOR to achieve long-term sustainability, management must demonstrate that the refinery can operate profitably and meet its financial obligations going forward. The debt write-off and restructuring efforts are critical steps towards achieving this goal.
The proposed debt relief and revival of TOR's operations are expected to have a positive impact on Ghana's energy sector. The refinery's increased production capacity will help meet the country's growing demand for petroleum products, reducing reliance on imports and supporting economic growth. The Finance Ministry's debt write-off is a significant step towards ensuring the long-term viability of TOR.
Key points
- The Ghanaian government has agreed to write off $120 million of TOR's $400 million legacy debt.
- TOR has processed approximately 2.5 million barrels of crude oil and produced over 382 million litres of petroleum products since resuming operations in December 2025.
- The refinery aims to ramp up production to between 45,000 and 85,000 barrels per stream day (bpsd) over the next 18 months.
