Centre For Energy Petroleum And Mineral Law Environmental Sciences Essay
This survey has assessed the public presentation of the Tema Oil Refinery.The analytical attack adopted for the survey involves both the computation of energy strengths and capacity uses.The energy strengths showed that the refinery is non efficient in footings of its energy demand from 2000 to 2011 as it Average Annual Energy strength of 0.07KOE per 1000 KOE of rough oil refined is much higher as compared to others with 0.05KOE per 1000 KOE of rough oil refined and therefore hapless public presentation in footings of energy ingestion.
The consequences besides indicated that, TOR ‘s capacity use rate fell between 14.26 % and 69.95 % which is low as compared to the general benchmark capacity use rate of 85 % and hence, executing under outlooks. The survey besides examined managerial attitudes that influence the refinery ‘s public presentation. The result revealed that unequal system care, deficiency of attachment to crude flexibleness demand and authorities policy of subsidization has impacted negatively on the public presentation the refinery.
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Table OF CONTENTaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
List OF ABREVIATIONSaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
List OF TABLESaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
List OF FIGURESaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
2.1 Global Refineries and Refiningaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
2.2 State of Tema Oil Refinery in Ghana ( TOR ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
2.3 Theoretical Frameworkaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ .
3.0 ANALYSIS AND DISCUSSION OF FINDINGSaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ .
3. 1 Technological Assessment ( TA ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
3.10 Capacity Utilisationaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
3.11 Energy Intensityaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
`3.2 Managerial Assessment ( MA ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ .
3.20 Maintenance Cultureaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
3.21 Government Policy of Subsidyaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
List OF ABREVIATIONS
TA Technological Assessment
TOR Tema Oil Refinery
IOC International Oil Company
NOC National Oil Company
BSPD Barrels Per Day
RFCC Residual Fluid Catalytic Cracker
CDU Crude Distillation Unit
KOE Kilotonnes of Oil Equivalence
LPG Liquefied Petroleum Gas
CU Capacity Utilisation
EI Energy Intensity
CRP Paraguana Refinery Complex
GHAIP Ghana Italian Petroleum Company
ATK Aviation Turbine Kerosene
OMC Oil Marketing Company
List OF TABLES
Table 1: Crude Oil Input and Petroleum Output ( Kilotonnes ) From 2000 to 2011aˆ¦aˆ¦aˆ¦..
Table 2: Petroleum Product Production and Import ( Kilotonnes ) From 2000 to 2011aˆ¦..
Table 3: Tema Oil Refinery Energy Demand Analysisaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ .
Table 4: Tema Oil Refinery Summary Characteristicsaˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
List OF FIGURES
Figure 1: Tendency in Crude Oil Input And Petroleum Output ( 2009-2011 ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦..
Figure 2: Tendency of Domestic Refinery Supply ( Output ) and Imported Quantity Of Petroleum Products ( 2000-2011 ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦
Crude oil in its natural province has no value until it is transformed into merchandises such as heating oil, Gasoline, Gasoil and other crude oil merchandises.[ 1 ]Therefore to refiner, the value of petroleum is nil other than the value of merchandises derived from it.[ 2 ]Globally, the capacity of refineries continues to increase as they expand. In the pre-war epoch, refinement was considered to be in its aureate age as they were profitable to run. However, the hereafter promises to convey new challenges and a competitory displacement that require new accomplishments and capacities to win. Refineries owned by International Oil Companies ( IOCs ) most at times operate expeditiously than National Oil Companies ( NOC ) as these IOCs are involve in multiple activities.[ 3 ]IOCs are able to understate the short-term cyclical effects of rough oil monetary values and uncertainnesss of the market due to the integrating of Refining and Exploration activities. However, NOCs and other independent refiners are vulnerable as they are exposed to the hazard of monetary value volatility.[ 4 ]
On African refineries in general, De Gouvello et al reported that merely 7 of the part ‘s operating refineries can be classified as universe graduated table. That is, three in Nigeria, three in South Africa and one in Sudan and all other refinement capacities across the part are “ kettle ” .[ 5 ]The capacity of the Tema Oil Refinery ( TOR ) can non be exempted from this categorization. TOR incorporated in 1960 as a simple hydro planing works refinery, over the past old ages has been the lone refinery in Ghana with the authorization to polishing rough oil to bring forth crude oil merchandises to run into the demands of the state.[ 6 ]
It is required to transport out this authorization in an efficient safe and environmentally friendly mode. It has undergone enormous reconstituting giving it more duties as its capacity additions from 28,000 BSPD to 45,000 BSPD.[ 7 ]A Residual Fluid Catalytic Cracker ( RFCC ) with a capacity of 14,000 BSPD has besides been added to the installation to enable it change over low value residue from the Crude Distillation Unit ( CDU ) to high value Liquefied Petroleum Gas ( LPG ) and Gasoline. It relies on about 80 % of electrical power generated internally and the staying 20 % from the national grid.[ 8 ]When compared to other refineries in the universe and in Africa, TOR operations are secondary as it has merely 55 per cent ( 55 % ) portion of the domestic crude oil market.[ 9 ]It production degree has been on the diminution for the past 11 old ages given rise to importing of more crude oil merchandises to fulfill domestic demands. It has of late, been sing relentless closures due to dislocations of some equipment. All these affected the end product of the refinery and therefore considered to be executing ill.
This survey assessed the public presentation of TOR for the past 11 old ages ( 2000-2011 ) . It is done to show a clear analysis and image of the public presentation of Ghana ‘s lone Refinery in the state. Many research workers have adopted different attacks and Analytic tools such as Energy Intensities and Capacity Utilisation to measure the public presentation refineries in the universe. This survey considered them to be critical in its appraisal, but limited to merely technological efficiency. The survey did it appraisal utilizing both Technological Assessment Tools such as Energy Intensities and Capacity Utilisation and Managerial Assessment Approaches such as care civilization, conformity with the petroleum flexible demands of the refinery and authorities policy of subsidization of crude oil merchandises.
This survey is organised into four chapters. Chapter one covered the Introduction. The background, the province of TOR and the theoretical model are captured in chapter two. Chapter three contained the analysis and treatments of the consequences. Chapter four is the reasoning chapter.
2.1 Global Refineries and Polishing
The refinement procedure is important to the crude oil value concatenation because petroleum oil has no value until it is transformed into concluding crude oil merchandises. Refining of petroleum oil started every bit early as 1861 in the United State of America.[ 10 ]The first refinery was opened 1861 to bring forth kerosine for illuming and warming.[ 11 ]Technological promotion led to the innovation of car and Electric illuming systems and shifted the procedure from kerosine to motor fuels chiefly Gasoline.[ 12 ]Polishing engineering continues to increase and as a consequence led to the debut of the Thermal Cracking and Catalytic Cracker in 1913 and mid-1930 severally.[ 13 ]Since so, the figure of runing refineries on planetary footing has non increase significantly. However, polishing capacity continues to spread out and germinate as major expansionary plants are carried out on the bing 1s. The largest refinery in word is the Paraguana Refinery Complex ( CRP ) located in Amuay and Cardon Venezuela with a refinement capacity of 940,000 barrel per twenty-four hours.[ 14 ]But sometimes the Reliance Industries I and II located next each other in Jamnagar India are combined, doing it the largest individual refinement composite in the universe with a capacity of 1,240,000 barrel per twenty-four hours ( Reliance In. I, 660,000 and Reliance In. II, 580,000 ) .
However, ExxonMobile Corporation is ranked as the universe ‘s prima refiner with a refinement capacity of 5,797,000 barrel per twenty-four hours.[ 15 ]
Most refineries on the African continent operate under smaller capacities. Merely a few are considered to be of universe criterion. Harmonizing to BP Statistical Review Energy Survey 2012, Africa had a 2011 refinery capacity of approximately 3.56 % of the universe sum. Skikda Refinery in Algeria is the largest in African with a capacity of 300,000 barrel per twenty-four hours, followed by Ras Lanuf works in Libya.[ 16 ]The Port-Harcourt Refineries I and II situated in Nigeria are the largest in Sub-Saharan Africa with a entire capacity of 210,000 barrel per twenty-four hours, followed by Shell/BP Sapref Refinery located in Durban with a capacity of 165,000 barrel per twenty-four hours.[ 17 ]The Tema Oil Refinery is the lone Refinery in Ghana charged with the duty of polishing rough oil to bring forth crude oil merchandises for national ingestion.
2.2 State of Tema Oil Refinery in Ghana ( TOR )
The Tema Oil Refinery ( TOR ) was originally known as the Ghana Italian Petroleum Company ( GHAIP ) Limited incorporated in 1960 but started operation in 1963 as a merely hydro planing refinery works.[ 18 ]The authorities of Ghana, by common understanding with ENI-Nazionie Intercarboni bought equity retention, therefore given it ( authorities ) 100 % ownership of the company.[ 19 ]As a state-owned refinery, the name changed from GHAIP to Tema Oil Refinery ( TOR ) in 1990.
TOR started with an initial refinement capacity of 28,000BSPD, but as a national plus, a Crude Distillation Unit ( CDU ) was installed in 1997 increasing it capacity to 45,000BSPD.[ 20 ]A Residual Fluid Catalytic Cracker ( RFCC ) with a processing capacity of 14,000BSPD was besides added in 2002 to enable the refinery convert low value residue from the CDU to high value Liquefied Petroleum Gas ( LPG ) and Gasoline.[ 21 ]TOR was intentionally designed to polish merely light and sweet petroleum. However, the invariably lifting of rough oil monetary values made direction to intermix different petroleums as a manner of optimizing its borders. Assorted light and sweet petroleums such as Brass, River, Forcados and Palanca are imported from neighboring states such as Nigeria, Equatorial, Guinea, Cameroon Gabon and Angola for refinement.[ 22 ]The end products of TOR include Diesel, Petrol, LPG, Aviation Turbine Kerosene ( ATK ) , Naphtha, Premix and Residual fuel.[ 23 ]The nucleus concern of TOR is to supply refined crude oil merchandises for the domestic market. But it has merely 55 per cent ( 55 % ) portion of the domestic market.[ 24 ]The refinery depended entirely on imported petroleum for it production until 2010 when it received some rough oil from domestic production. The inability of TOR to bring forth to petroleum merchandises for the full domestic demands of the state has created the demand for importing of refined merchandises into the domestic market and the lifting degrees of these imports have raised concerns among the Ghanese populace. Table 1 provides informations on the measures of rough oil input and crude oil end product of the refinery from 2000 to 2011. Figure 1 depicts the Trend in rough oil input and crude oil end product for the same period.
Petroleum End product
Table 1: Crude OIL INPUT AND OUTPUT ( Kilotonnes ) FOR TOR ( 2000-2011 )
Beginning: National Energy Statistics, 2000-2011[ 25 ]
FIG. 1 TREND IN CRUDE OIL INPUT AND PETROLEUM OUTPUT ( 2009-2011 )
Beginning: Concept of the Writer
From Table 1, it can be seen that, the twelvemonth by twelvemonth petroleum input exceeded the crude oil end product produced. This is due to losingss incurred during refinement. It is besides observed that 2006, 2009 and 2010 recorded a much lower decreases in both petroleum inputs and crude oil end products with 2009 entering the worse of it. These are grounds of hapless public presentation of the refinery.
Due to this hapless public presentation in 2006, the authorities of Ghana approached two South Korean Companies, SK Corporation and Samsung Corporation to sell a interest as portion of programs to bring forth US $ 6 billion for infrastructural development within the refinery.[ 26 ]However, the trade did non happen due to proficient challenges the refinery was sing at that clip.
Again, Table 2 shows the measure of domestic refinery supply and the measure of imported crude oil merchandises into the state from 2000 to 2011. Figure 2 illustrates the Trend of these measures for the same period.
Table 2: Petroleum PRODUCT PRODUCTION AND IMPORT ( Kilotonnes )
DOMESTIC REFINRY SUPPLY
Percentage OF IMPORTED ( % )
Beginning: National Energy Statistics, 2000-2011
FIG. 2 TREND OF DOMESTIC REFINERY SUPPLY ( OUTPUT ) AND IMPORTED QUANTITY OF PETROLEUM PRODUCTS ( 2000-2011 ) Beginning: Concept of the Writer
From both Table 2 and Figure 2, it is observed that, as domestic refinery supply additions, imports tend to diminish from 2000 up to 2004. However, this relationship reverted. From 2005 to 2011, the portion of crude oil imports has been on the addition traveling from 578.3 kilotonnes in to 2005 to every bit high as 2,108.7 kilotonnes in 2011 while that of domestic refinery supply continues to diminish from 1,540.8 kilotonnes in 2005 to every bit low as 957.7 kilotonnes in 2011.All these deficits are attributable to both Technical inefficiencies and managerial inefficiencies which are discussed into inside informations in the following subdivision of this survey.
2.3 Theoretical Model
The attending of most intellectuals since 1970 has ever been on the Energy Utilisation and effectual direction of refineries in the developed universe states. Romulo et ‘ Al purported that complex refineries can better their energy ingestion through assorted ways such as increased heat interchange between procedure watercourse, thermic exchange within and between process units and hotter charge provender between units, usage of more efficient furnace procedures and other smart ways of using modern engineering.[ 27 ]
Romulo et ‘ Al evaluated the energy efficiency of Brazilian petroleum oil refinement and compared it with the refinement of petroleum oil in US from 1930 to 2008. They concluded that, a Brazilian refinery with a capacity of 157,000 barrel per twenty-four hours which undergone modernization in 2008 cost US $ 1.3 billion and as such realised an addition of 17 % in its capacity. The consequence besides indicated that, the refinery energy ingestion fell from 0.75MBtu to 0.52MBtu per barrel processed and hence addition in complexness reduces the energy consumed in the concluding production procedure.[ 28 ]Others contended that there is no individual manner of measuring the public presentation of refineries across board despite the fact that, refinement procedures are energy intensive and exergy analysis appeared to be the most regular tool for assessment. For illustration, Badmus et ‘ Al reviewed the public presentation assessment on the refineries in Nigeria utilizing energy strengths for the analysis and conclude that, the energy ingestion forms of the four refineries are below international benchmark in the oil and gas industry.[ 29 ]
Jesuleye et ‘ Al besides contributed to what this survey referred to as “ Technological Appraisal ” .[ 30 ]They besides evaluated the energy demand of Port Harcourt refinery in Nigeria and its policy deductions through the computation of energy strengths as a manner of finding the one-year energy demand of the refinery. The consequence showed that “ the existent energy demand per twelvemonth for treating rough oil into crude oil merchandises exceeded, in changing grades the stipulated refinery criterion of 4 barrels of oil equivalent ( BOE ) per 100 BOE as the grounds revealed a scope between 4.28 BOE and 8.58 BOE per 100 BOE processed. They nevertheless, included a managerial attitude as Turn-Around Maintenance agenda in their analysis which this survey considered to be of import in measuring the public presentation of refineries.
Many research workers have adopted different attacks and Analytic tools such as Energy Intensities and Capacity Utilisation to measure the public presentation refineries in the universe. This survey considered them to be critical in the appraisal, but limited to merely technological efficiency and therefore classified the attack as “ Technological Assessment ” of public presentation.
Research workers with their different rational positions evaluated the public presentation of refineries across the universe with the usage of different analytical tools as they exist. One of the most widely recognized and realistic tool used is the Solomon Energy Intensity Indicator ( SEII ) .[ 31 ]It provides a more realistic contemplation of energy strength of the refinery as it creates room for works by program analysis, considered the different types of terminal merchandises, recognises the fact that production procedures are specific and takes into history the operations of the works.
Harmonizing to Nyboer and Rivers 2002 cited by Jesuleye et ‘ Al, this method has been embraced and applied late by the Canadian Industry Program for Energy preservation in Canada in an effort to develop Energy ingestion benchmark usher for conventional crude oil refinement in Canada.
For the intent of this survey, the application of SEII could non happen due to the absence of single informations on energy ingestion and the specific activity degrees of the refinery. However, the Energy strengths were calculated based on the concluding energy ingestion of TOR and its overall end product. As indicated by O. A. Jesuleye et ‘ Al, the theoretical account has it root from the European Economic Commission Funded undertaking titled Energy Master Plan for Rural Development in Nigeria.[ 32 ]The Capacity Utilisation of the refinery was besides determined utilizing it end product to guarantee a full assessment of the proficient efficiency of the refinery. The survey besides investigated into the managerial facets of the refinery.
3.0 ANALYSIS AND DISCUSSION OF FINDINGS
Both Technological Assessment ( TA ) and Managerial Assessment ( MA ) are carried out on TOR to determine realistic grounds why the refinery is executing so ill.
TA focused on the Energy Demand through the finding of Annual Energy Intensities utilizing Final Energy Consumption method and the Annual Capacity Utilisations utilizing the Capacity Utilisation attack.
3. 1 Technological Assessment ( TA )
Energy Intensity ( EI ) = Final Energy Demand aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ ( 1 )
Capacity Utilisation ( CU ) = Output produced X 100aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.. ( 2 )
Actual production degree
The assorted Annual Energy Intensities and Annual Capacity Utilisations from 2000 to 2011 are presented in Table 4 below.
Table 3: TEMA OIL REFINERY ENERGY DEMAND ANALYSIS
*Final Energy Demand ( KOE/Yr )
*Crude Input ( KOE )
*Petroleum End product
**Annual Energy Intensities KOE/1000
*Required standard Intensity KOE/1000
**Annual Capacity Utilisation %
*Benchmark capacity Utilisation %
Beginning: * Datas from National Energy Statistics, 2000-2011
**Calculated values utilizing EI and CU expressions
NA ; Not Available
Table 4: TEMA OIL REFINERY SUMMARY CHARACTERISTICS
Unit of measurement
Average ANNUAL CAPACITY UTILISATION**
% ( KOE )
Average ANNUAL ENERGY INTENSITY**
Entire LOSSES ESTIMATE*
% ( KOE )
* Entire Losses Estimate of 3-6 % is obtained from National Energy Commission, 2011,
** Calculated from Table 4.
3.1.0 Capacity Utilisation
From Table 4, the Annual Capacity Utilisation of the refinery ranged between 14.26 % in 2009 and 69.95 % in 2004. As indicated in Table 5, the refinery has an Average Annual Capacity Utilisation of 48.29 % . This is much lower as compared to the general benchmark Capacity Utilisation of 85 % in the refinement industry. It shows that the refinery is runing under criterion and hence indicates a hapless public presentation. Losses besides accounted for about 3-6 % of petroleum inputs as indicated in Table 5. These losingss are due to the low capacity and inefficiency of the premium reformist of the refinery.
3.1.1 Energy Intensity
From Table 4, the Annual Energy Intensities of the refinery ranged between 0.050 KOE in 2001 and 0.101 in 2009 per 1000 of petroleum processed. This shows that the refinery was more energy efficiency in its ingestion in 2001 than in 2009. As indicated in Table 5, the refinery besides has an Average Annual Energy Intensity of 0.07 KOE per 1000. When compared to the Annual Energy Intensity of other refineries even with much higher capacities such as Port Harcourt Refinery with a stipulated Intensity of 0.04 KOE per 1000, TOR is inefficient in footings of Energy Consumption. This shows the refinery consumes more energy, even though its end product degrees are falling and therefore indicates hapless public presentation on it portion.
From the above Technological Assessment, it clear that the Tema Oil Refinery is executing ill as it produces below capacity, consumes more energy than others and incurred greater per centum of losingss.
3.2 Managerial Appraisal
3.2.0 Maintenance Culture
There are a figure of direction related issues which impacted negatively on the public presentation of TOR. These included the followers ;
The failure of direction to constantly transport out care on the installation causes frequent closing of the refinery. Harmonizing to Odiguri et ‘ Al cited by Badmus et ‘ Al 2012, the Turn Around Maintenance inspection and repair of refineries in general, is recommended to be undertaken every 18 or 24 month.[ 33 ]This is non done at TOR. Care is merely carried out when a mistake is detected.[ 34 ]Even at the point of transporting out care, direction still employ antique industrial practises. This attitude of direction affected the proficient efficiency of the refinery and hence, lowers the end product than expected.
A break in H2O supply is yet another ground that consequences in the hapless public presentation of the refinery. TOR dependance entirely on Ghana Water Company Limited for supply of H2O.[ 35 ]This beginning nevertheless, is non dependable as the company normally encounter frequent dislocations due its elderly grapevines.[ 36 ]Any break in H2O supply to the refinery causes intermittent closure of the refinery and as such, reduces the end product of the refinery at those times.
Lack of conformity to crude flexibleness regulations at TOR besides influences its public presentation. The refinery was intentionally designed to polish merely light and sweet petroleum.
However, direction tend to intermix light rancid petroleum with light and sweet petroleum as manner of maximizing their net income borders due to the lifting monetary values of light petroleum.[ 37 ]This normally affects the operations and efficiency of the refinery, therefore cut downing its concluding end product.
3.21 Government Policy of Subsidy
As a state-owned refinery, the activities of Government can non be excluded from the grounds why TOR performs so ill. Government as the exclusive proprietor of the refinery uses the National Petroleum Authority as a regulative organic structure to find the monetary values of crude oil merchandises in the state.[ 38 ]This organic structure besides has the duty of implementing authorities policy instruments such as revenue enhancements and subsidies at the crude oil subsector degree. To maintain ex-pump monetary values of fuel depression, the authorities to a great extent subsidize ex-refinery monetary values.[ 39 ]In 2003 authorities subsidy on fuel was 29.5 % but increase it to about 39.7 % of the monetary value in 2005.[ 40 ]In entire, the authorities spent about US $ 276 million on fuel subsidy entirely by the terminal of 2011. However, these monies are barely recovered by the refinery. Non-payment of measures by Oil Marketing Companies ( OMCs ) besides increases the predicament of TOR. This increases the liability of the refinery and hence reduces its ability to procure rough oil for its operation.
Despite the fact that proficient efficiency and Capacity Utilisation are important in finding the public presentation of a refinery, managerial patterns and Government activity are every bit of import in measuring the public presentation of TOR as they give accounts to the causes of these inefficiencies and therefore, supply empirical groundss to the ground why TOR is executing so ill.
Based on the Analysis and happening on TOR, it is clear that the usage of Energy Intensities and Capacity Utilisation as indicated by other research workers are of import considerations in measuring the public presentation of refineries. But managerial patterns such as care civilization, conformity with care ordinances, conformity with rough flexibleness demand and Government policies proved to be influential in refinery public presentation and as such must be considered by future surveies. The survey showed that Energy Intensity and Capacity Utilisation find the Technical Efficiency of the refinery. From the survey, the energy ingestion of TOR is non efficient as compared to others. Besides, TOR losingss are due to proficient inefficiencies and managerial inaccuracies. It Average Annual Energy Intensity of 0.07KOE/1000 is hapless as others have Average Annual Energy of 0.05KOE/1000. Besides, the Average Annual Capacity Utilisation of 48.29 % is far below the criterion bench grade of 85 % . There is besides unequal system care at TOR which has impacted negatively on its public presentation. From the survey it is apparent that, non-payment of subsidy measures by authorities affected it ability to procure rough oil for its operations and therefore cut downing its end product. These hence suggest that, the Tema Oil Refinery is so executing ill due to Technical and Managerial challenges at the installation.