The Tema Oil Refinery (TOR) appears to be in dire straits, as activities have grounded to a halt and the company is in talks with some banks to raise more money to pay off its debts and stay afloat, Kwabena Donkor, the country’s deputy Energy Minister has said. And one of the banks TOR is talking to includes First Bank of Nigeria. The others are BNP Paribas and Ecobank. The country’s only oil refinery has not been able to raise money to purchase crude to refine, and it is simply storing oil for private oil companies who do not have such facilities for distribution. The TOR owes Ghana Commercial Bank $600 million and another $30 million to other unnamed creditors and is unable to pay. Government has therefore set up a four-man transaction advisor to find ways of clearing the debts. Other sources, however say the debt is over one million dollars. When ghanabusinessnews.com called the head office of First Bank of Nigeria, officials said they were unaware of such development. Ghana Commercial Bank (GCB) officials also declined to comment. It is however, difficult to understand how GCB has not collapsed when one company owes it $600 million. That could probably be due to the bank’s strength as the only true national bank. But any other bank would have collapsed as examples in other places including Nigeria have shown. It is exactly one year ago when Lehman Brothers, the world’s largest investment bank collapsed and plunged the entire world into the current economic crisis. Meanwhile, on why the GCB continues to support an obviously inefficiently run state company, an insider told ghanabusinessnews.com that, the bank does so “in the national interest.” And asked, “can you imagine what would have happened during this time if GCB has not been giving money to TOR?” Apart from the ‘national interest’ angle, could this mess be as a result of political misjudgments? As the case has always been in the affairs of this country? Is it possible that there are other state companies that are being so badly managed that they have similarly bad debt profiles, which are yet to be known? Are these signs that, when commercial production of oil begins in the country in 2010, the cycle will continue? Or the fact that TOR is looking towards other banks is a sign that GCB is beginning to feel the heat? What is even more interesting about the story is that, while the company has failed in its primary objectives of obtaining and refining crude oil, management is already talking about producing biofuels. Source: Ghanabusinessnews.com