Acting Managing Director of Tema Oil Refinery’s (TOR), Edmund Kombat has disclosed that the company’s entire debt stock as of December 2024 was $517 million.
He attributed this to a combination of government accounting changes and operational liabilities.
Speaking to journalists following a presentation before Parliament’s Energy Committee, he noted that trade obligations and unpaid crude oil supplies over the years were responsible for a significant portion of the debt.
He also revealed that the government’s continuing arrangement with the International Monetary Fund (IMF) had resulted in the reclassification of several grants originally given by the Ministry of Finance as debt, which contributed to the increase in TOR’s outstanding debts.
“We are doing that verification, and as I mentioned, once we do that verification and authentication of what we have been able to bring down, that will be communicated publicly.
“So what occasioned it trade debts, sometimes third parties. And then there were also debts that are legacy debts where crude was supplied, it was not paid.
There were times that the Ministry of Finance in the past had given some funds to TOR. Some of it for example was grant and then when they entered into the IMF, the IMF asked them to reclassify it as debt. So those things have accumulated to that amount of money.
And I think that the last time TOR traded, some of the trade were not hedged and so there was a lot of exposure which led to a lot of debt ballooning,” he stated.
According to the acting TOR MD, his administration would make sure that the exposure that resulted in the large debts doesn’t happen again.
Credit: 3news