Accra, Sept. 2, GNA - Ghana and Equatorial Guinea have reached an agreement under which it has agreed to supply crude oil to Ghana and in return receive refined petroleum products.

The agreement is part of a comprehensive plan to make Ghana the nerve centre and strategic net exporter of power in Africa. Dr Kwesi Nduom said this in Accra on Thursday, when he updated journalists on the energy situation and the West African Gas Pipeline Project.

He said he technical details of the arrangements were being worked out for the mutual benefit of both countries.

Ghana expects the first shipment of crude oil to arrive at Tema from Equatorial Guinea by the end of October.

"This, we plan to be the first of such arrangements with crude oil producing nations and will allow us to expand the Tema Oil Refinery and proceed with other related projects," he added.

Commenting on the state of the petroleum sector, Dr Nduom said government had reconstituted the National Petroleum Tender Board, which is to be solely responsible for monitoring and publishing import parity prices for petroleum prices for petroleum products and also review the integrated distribution margin to the sub-regional level.

He said by the reconstitution, government was no longer directly involved in setting the price of petroleum prices.

Dr Nduom said so far government had removed about 3.2 trillion cedis out of the 4.2 trillion-cedi debt accumulated at the end of 2000 due to under pricing.

"Currently, TOR is doing well and has shown signs of registering some marginal profits for the first half of 2004 as its efficiency is improving on a consistent basis."

Dr Nduom said GOIL's balance sheet had improved considerably with assistance from government and was in a good position to offer the value they had created to the Ghanaian public through the Ghana Stock Exchange soon.

Strategic reserves of petroleum products managed by the Bulk Oil Storage and Transport at the end of the 32nd week showed encouraging levels and in most cases averaging over three weeks stock.

Liquefied Petroleum Gas averaged 11 days, premium 25 days, kerosene and jet fuel 56 days, gas oil 21 days and fuel oil 45 days.

This is in sharp contrast to what was found when the new administration took office when most of the products averaged 14 days.

Dr Nduom said from July 2003 to July 2004, when world crude oil prices went up, government had spent 1.134 trillion cedis to support TOR due to shortfalls in petroleum cost recovery.

He expressed the hope that crude oil prices would fall in the near future to the more comfortable 25 to 30 dollar range.

"On our part we are working diligently to address the complicated matter of petroleum sector deregulation. The end result will be the creation of an independent regulator for the petroleum sector to remove the hand of government from decision-making with regard to the supply and pricing of products."