Equatorial Guinea has agreed to supply Ghana with 2 million barrels of crude oil per year in a deal meant to help Ghana’s debt-ridden refinery continue operating, a Ghanaian presidential spokesman said on Thursday.
Ghanaian President John Atta Mills secured the deal at talks with Equatorial Guinea leader Theodore Nguema Mbasogo. But the supply accord accounts for just a small part of the refinery’s needs and comes ahead of Ghana’s plans to start oil production.
“The two leaders have reached an agreement and Ghana will receive the first crude oil shipment of 1 million barrels in July this year,” Korku Anyidoho, a spokesman for Mills, said.
Equatorial Guinea will sell the oil to Ghana under a 90-day credit agreement, similar to the deals Ghana has struck with Libya and Nigeri, Anyidoho said.
Mills sacked the head of the Tema Oil Refinery this week after more than a year in which the plant’s huge debt burden hindered its ability to buy oil cargoes, leaving it idle for long stretches.
Problems at the refinery since last year have led to repeated protests by workers, who last month called for the resignation of Ghana’s energy minister.
The 45,000 barrel-per-day plant is now running at about 70 percent after the recent arrival of a cargo, a union leader said on Wednesday. But despite a partial payment of TOR’s debt by Ghana’s government in March, the refinery is still struggling to acquire letters of credit required to buy more oil.
Equatorial Guinea is one of sub-Saharan Africa’s biggest oil producers with about 250,000 barrels per day (bpd) of output.
Ghana is expected to join the ranks of commercial oil producers by the end of this year when pumping starts from the giant offshore Jubilee field. Initial production is seen at 120,000 bpd which could ramp up to 250,000 bpd in five years.
SOURCED FROM REUTERS