Wednesday, September 30, 2009

Nigeria crude oil transaction on course

Government has confirmed that the proposed crude oil transaction with Nigeria is on course, Deputy Energy Minister Dr Kwabena Donkor has said.

”We are almost at the completion stage of the transaction to finalise the details soon to be signed by the two countries.”

Dr. Donkor, who made this disclosure in Accra when briefing the media on the petroleum situation in the country, said: “once the details contained in the contract are finalised, the allocation will be factored into the lifting plan of the Nigeria National Petroleum Corporation (NNPC).”

He explained that the technical team from the Ghana National Petroleum Corporation is expected to leave for Nigeria this week to finalise the agreement for the contract between the two nations.

“The technical agreement between Ghana National Petroleum Corporation (GNPC) and the Nigeria National Petroleum Corporation (NNPC) is nearing completion.”

President John Evans Atta Mills, following the fuel shortage that hit the country during the first quarter of the year, travelled to Nigeria to strike a deal with President Umaru Musa Yar’Adua of Nigeria to supply 60,000 barrels of crude oil to Ghana on a ninety-day credit basis.

Critics have raised fears over the deal - which was supposed to have been completed after the remaining agreement to be signed during the first quarter of the year failed to materialize - since Ghana is yet to receive crude from the Nigerian government.

Dr. Donkor, who also spoke on the latest fuel shortages in the country, attributed it to the late arrival of a fuel vessel last week.

He assured that government is developing strategies that will ensure a permanent solution to the persistent oil challenges facing the country.

“Government is seriously working on modalities to ensure that the country has adequate supplies of oil all-year-round.
“The petroleum crisis will soon be over, with the importation of 34,000 metric tonnes of petroleum products over the week-end.”

He said, since the beginning of the year, the management of Tema Oil Refinery (TOR) has had liquidity problems with the issuing of Letters of Credit (LOC) from Ghana Commercial Bank (GCB) to import petroleum products.

“Since September last year, TOR has not been able to issue LOCs to purchase crude oil on the international market.”

Government has contracted Ecobank Transnational Incorporated to raise a syndicated US$300 million to bail out TOR.

TOR is indebted to the Ghana Commercial Bank (GCB) alone to the tune of GH¢900 million and has been facing serious challenges over the past four months in respect to its ability to raise letters of credit for the procurement of crude oil.

The Ecobank facility will cover about half the debt owed by TOR to GCB which led to its suspension of crude oil refining earlier in February.

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