IMF Visit Puts TOR’s Recovery Under Scrutiny

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The International Monetary Fund’s engagement with Tema Oil Refinery (TOR) comes at a critical point in the state-owned company’s recovery, as efforts to restore crude processing, tighten financial controls and secure feedstock supply raise a broader question: can the refinery turn its operational revival into lasting financial sustainability?

The IMF Country Team, currently in Ghana, visited TOR to examine its operations and understand the recovery measures introduced by management.

The engagement formed part of the team’s wider consultations with public authorities and selected state-owned enterprises, placing the refinery’s progress within the broader context of Ghana’s public-sector financial management and economic reform efforts.

During discussions with the delegation, TOR Managing Director Edmond Kombat outlined the operational and financial difficulties inherited by the current management and the measures implemented since May 2025 to rebuild confidence in the refinery.

A central part of that effort has been the rehabilitation and restart of crude processing through the refinery’s Crude Distillation Unit (CDU), alongside changes to financial reporting, internal controls, staff-related reforms and arrangements intended to sustain crude supply.

The visit offers an opportunity to examine TOR’s recovery beyond the visible milestone of restarting processing. For a refinery with strategic importance to Ghana’s petroleum supply chain, the more consequential test is whether renewed operations can be sustained commercially without creating further financial pressure on the state.

The rehabilitation and restart of the CDU represent an important step towards restoring TOR’s core function. A refinery cannot contribute meaningfully to domestic fuel supply through infrastructure alone; its processing equipment must operate reliably, receive adequate crude feedstock and produce petroleum products that can compete in the market.

However, restarting a unit does not automatically establish that the entire refinery has returned to commercially sustainable operations.

TOR’s management has also briefed the IMF team on work to restore other critical units and increase processing capacity. These measures suggest that the recovery remains an ongoing process rather than a completed turnaround.

The distinction matters because refining performance depends on the interaction of several factors: equipment reliability, crude procurement, operating costs, product yields, working capital and the ability to sell output at prices that cover the cost of production.

If any of these elements remains weak, renewed processing could fail to translate into a durable improvement in the refinery’s finances.

For TOR, the next phase must therefore be measured not simply by whether crude can pass through the CDU, but by how consistently the facility operates, how much usable output it produces and whether that output generates sufficient revenue to support continued operations.

The management briefing also highlighted improvements in financial reporting and controls. These measures are significant because operational recovery can be undermined when procurement commitments, payment obligations and cash flows are not adequately managed.

For a capital-intensive refinery, financial discipline is closely connected to operational continuity. Crude purchases require substantial funding, maintenance must be planned and financed, and suppliers need confidence that contractual obligations will be honoured.

Weak controls can create a cycle in which limited working capital constrains crude purchases, reduced processing limits revenue generation, and unpaid obligations make future procurement more difficult.

Improved reporting can help management identify such pressures earlier, assess the true cost of operations and make better-informed decisions about maintenance, procurement and investment. Stronger internal controls can also support accountability for how public resources are used.

Yet the value of these reforms will depend on implementation. Better reporting systems do not, by themselves, eliminate accumulated liabilities or guarantee that the refinery can finance its operations from internally generated cash.

The critical question is whether management can demonstrate sustained improvements in cash management, cost control, payment discipline and the financial performance of the refinery over time.

That is particularly relevant in a state-owned enterprise environment, where persistent operating difficulties can ultimately create demands for government support.

TOR’s emphasis on sustained crude supply highlights another condition for recovery: the refinery needs reliable access to feedstock at commercially viable terms.

Even a rehabilitated facility cannot generate revenue when crude deliveries are irregular or the financing required to purchase feedstock is unavailable.

Uncertainty over supply can also complicate production planning, increase the risk of idle equipment and weaken the commercial case for investing in further rehabilitation.

For Ghana, the implications extend beyond TOR’s balance sheet. A functioning domestic refinery could provide an additional route for processing crude and supplying petroleum products, potentially broadening the country’s options within the downstream market.

However, domestic refining should not automatically be equated with cheaper fuel or reduced import dependence. Those outcomes depend on crude sourcing costs, refinery efficiency, product quality, operating expenses, financing arrangements and prevailing international prices.

TOR must therefore establish that its operations can compete with alternative sources of refined products while meeting the reliability and quality requirements of the market.

The refinery’s strategic value will be stronger if it can sustain production on commercially defensible terms rather than depend on repeated interventions to keep equipment running.

The IMF delegation was also briefed on ongoing work to increase TOR’s processing capacity and restore additional critical units. These plans could expand the refinery’s contribution to Ghana’s energy security, but they also introduce important investment questions.

Additional capacity has limited value if the refinery cannot secure sufficient crude, finance operations or sell its products profitably.

Expanding processing capability without addressing these underlying constraints could increase the amount of capital exposed to operational and market risks.

The sequencing of investment is therefore crucial. Rehabilitation priorities need to be matched with credible cost estimates, reliable feedstock arrangements, realistic production assumptions and a clear assessment of market demand.

Management must also distinguish between expenditure required to restore essential operations and investments intended to expand future capacity. The former may be necessary to protect existing assets, while the latter should be supported by a stronger commercial case.

For government and other stakeholders, transparency around the cost, financing and expected returns of the recovery programme would help establish whether progress is translating into a sustainable business model.

The IMF visit does not, in itself, demonstrate that the refinery has achieved financial recovery or that all outstanding challenges have been resolved.

Rather, it provides an opportunity for the delegation to gain a clearer understanding of the measures underway and the conditions that will determine their success.

The discussions were followed by a tour of the refinery, during which the delegation viewed rehabilitated facilities and ongoing works. Members expressed appreciation for the progress made and for the opportunity to better understand TOR’s operations and recovery process.

That acknowledgement is an indication of engagement, not independent confirmation that the refinery’s financial and operational problems have been overcome.

For Ghana, the broader issue is how to preserve the strategic value of a state-owned refinery while ensuring that public resources are used effectively.

A stronger TOR could provide additional domestic processing capacity and improve flexibility in the petroleum supply chain. A refinery that remains financially fragile, however, could continue to expose the state to operational and fiscal risks.

The recovery must consequently be assessed against measurable outcomes: sustained crude-processing activity, improved equipment reliability, dependable feedstock supply, stronger financial controls, better cash-flow management and progress towards covering operating costs through commercial activity.

The visit by the IMF Country Team places these questions in the context of Ghana’s wider economic management. But the decisive evidence will emerge from TOR’s performance after the delegation leaves.

The central test for TOR is no longer simply whether it can restart its refinery. It is whether it can keep it running reliably, finance its operations responsibly and demonstrate that the recovery can endure without recurring financial distress.

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