Ghana Starts Fuel Exports To West African Countries
Last week, my best friend, Kweku Boateng, was in his most disagreeable mood when I informed him that Ghana was exporting petroleum products to Burkina Faso and other countries in the sub-region.
“I honestly do not believe that Ghana is exporting petroleum products to our neighbours. It is true Ghana is producing oil in the Jubilee fields. But we all know that the Tema Oil refinery is a non performing albatross. As for the BOST (the Bulk Oil Storage and Transportation company), the least said about it, the better. When was the last time BOST was able to store any petroleum products for the nation?” Kweku argued.
He was arguing when we heard an interview the Minister of Petroleum was granting Radio Gold on Wednesday. Kweku and I heard some wonderful achievements of President Mahama in the petroleum sector. Honestly, Kweku has come to believe that President Mahama’sachievements in the petroleum sector surpasses any achievements in the roads, water, education, health and transportation sectors, etc. I am particularly pleased to have had Kweku get properly schooled on what efforts have been put in to reach the point where our neighbours have to rely on Ghana’s infrastructure for the supply of their required petroleum products.
On the radio program , the Minister of Petroleum, Emmanuel Armah Kofi Buah, said that, “Ghana has begun export of petroleum products to our neighbouring countries. This is being done by the Bulk Oil Storage and Transportation Limited (BOST) under the leadership of its Managing Director, Kwame Awuah-Darko.” Wow!!
Hon. Buah, who is also the Member of Parliament for Ellembele explained government policy behind this laudable BOST initiative when he said, “as stated by H.E. the President in his state of the nation address, our vision is to make Ghana a hub for petroleum product distribution in the sub region. Consequently, BOST has begun supplying petroleum products to the land-locked countries of Burkina Faso, Niger and Mali from the Bolgatanga depot and by sea to Benin and Nigeria. There are plans to extend the exports to Liberia in the coming months as well. BOST has also successfully transferred 60 million litres of gasoline and gasoil (the equivalent of 1,200 truckloads) through the pipeline to the Bolgatanga Depot for export in the first half of 2016.
As far as I know, Ghana has always imported its crude oil and finished petroleum products. Fuel prices have in the past conspired to throw our country’s economy out of gear. Historical records I have seen show that in 1982 for instance, Ghana spent 75 percent of her foreign exchange earnings on importing petroleum products and most of the rest on basic food imports. By 1989, oil imports used 20 percent of foreign earnings and 10 percent.”
What could have brought about a dramatic turnaround in the country’s fortunes for Ghana to be exporting petroleum products to its neighbours??
Thankfully, MrBuah explained that the Ministry of Petroleum aggressively rolled out some strategic plans to increase national access to petroleum products and also initiated some policies and restructured some institutions in order to improve the enabling environment for investment in the downstream petroleum sector. Some of these initiatives involved the restructuring of BOST and TOR. According to the Minister the reforms have begun to bear fruits as exemplified by the spectacular achievements of BOST
“The restructuring of BOST has resulted in a turnaround in the performance of this strategic national asset which is now successfully fulfilling its mandate of ensuring availability of petroleum products. The National strategic stock is at an all-time high; with about 1million metric tonnes of products imported from January to June, 2016.
The Bolgatanga Petroleum Depot with a capacity of Forty Six (46) Million Litres of refined gasoline and gasoil was re-commissioned in August, 2015. Eight and a Half Million Litres of the Nine (9) Million Litres of dead stock that had been sitting in the pipeline since 2004 was also successfully recovered,” he stated.
I researched more on the issues and realized that quite recently, the Managing Director of BOST also confirmed and clarified the issues surrounding the remarkable achievements of his company. He told the Business and Financial Times that the reforms being carried out in BOST have caught the attention of both commodity suppliers and the global financing banks, thereby weaning the company off its reliance on local banks for financing petroleum imports.
When he took over as MD some few years ago, he said the company was seen as a failed state-owned enterprise, and had neither the confidence of local banks nor bulk distribution companies.
“Our turnaround strategy is aimed at restoring the company’s operations –restructuring the company’s organisation structure, restructuring the company’s balance sheet — as well as restoring the company’s infrastructure to be able to enhance our operations.”
BOST, he emphasized, has also repositioned itself within the West African sub-region and has now been recognised by Sonaby — Burkina Faso’s State Owned Petroleum Company — as one of its suppliers of choice.
Additionally, he said, the BOST facility in Buipe that was idle when he took over has now become a depot of choice for Malian petroleum marketers.
Kwame AwuahDarko indicated that with the continued improvement BOST infrastructure across the country, the company would soon become the biggest player in the country’s downstream petroleum sector as well as in the West African sub-region outside of Nigeria.
The hard working Managing Director indicated that five of BOST’s terminals — Accra Plains, Akosombo, Kumasi, Buipe and Bolgatanga — which had collapsed, are not only operational now “but have recorded two straight years of operating with product gains” amounting to GH¢8,400,000 in 2014, and GH¢3,100,000 by quarter-three 2015.
At the re-commissioning of the 36,000tonne capacity Bolga depot on October 12, 2015, Awauh-Darko announced that BOST’s 267-kilometre pipeline between the Buipe and Bolgatanta depots had also been revive In the process, he said, some 8.2million litres was recovered from 9 million litres of fuel which had been sitting in the pipeline for nine years.
“The successful restoration of BOST facilities has enabled the company to return to its core mandate of maintaining strategic fuel stocks across the country from Tema to Akosombo, Kumasi to Buipe, and to Bolgatanga,” Awauh-Darko said at the review meeting.
“BOST today, as we speak, is holding above the minimum stock requirement which is six weeks of National Petroleum consumption. BOST is also servicing a core number of BDCs which are in turn supplying the Oil Marketing Companies. Most importantly, BOST is doing so not only efficiently but also profitably,” he added.
Kwame AwuahDarko, said BOST now has suppliers’ credit lines of up to US$280million on open account terms.
To conclude, I wish to emphasize that a lot of achievements have taken place in BOST which have to be made known to the Ghanaian public. What I find very interesting about the BOST experience is that it is being replicated in the Tema Oil Refinery (TOR). Under the leadership of the same personality, Kwame AwuahDarko. In deed the Minister of Petroleum touched on the impressive work being done at TOR and BOST when he revealed the following:
“Last year, Government embarked on a comprehensive restructuring of the Tema Oil Refinery (TOR). I am glad that due to Government’s intervention, the Tema Oil Refinery is currently in operation. The strategic partnership between BOST and TOR has brought back life into the Refinery as BOST purchases crude for TOR to refine at a tolling fee.
Well done President Mahama.
By: Fonibi Larnor