Total Chief Stokes Speculation Over Petrochemicals Operations

Total SA (FP) Chief Executive Officer Christophe de Margerie raised the possibility that the country’s biggest oil company is planning an overhaul amid speculation over the future of its petrochemicals operations.

An employee meeting has been called for Sept. 4 to discuss Total’s petrochemicals strategy as well as a future project for its Carling plant in northern France, de Margerie said in an interview today outside Paris. He told a panel discussion the company may restructure its French operations.

He declined to comment further on Carling, citing French law under which changes that may affect jobs must first be given to workers at meetings like the one planned for next week.

“Total could announce a plan to halt the steam cracker” at Carling, Eric Sellini, the CGT union coordinator at the French oil company, said by telephone. “I don’t think the whole site will be shut but we just don’t know.”

Total, which gets most of its earnings from oil and natural gas production, has struggled to boost profits at its refining and petrochemicals divisions in recent years. The explorer unveiled an overhaul in 2011 to merge crude processing and petrochemicals and separate out fuel marketing.

“Total, like others, will have to carry out” a restructuring in France, de Margerie said today during a panel discussion at a meeting of the employers’ group known as Medef.

Europe’s third-largest oil company has already reduced European refining through the closing of its plant near Dunkirk in France, capacity reduction at Normandy and the sale of its 49 percent stake in Spain’s Cia. Espanola de Petroleos SA. Total has also tried and failed to sell its Lindsey plant in the U.K.

Make Plastics

The Carling plant, which makes petrochemicals such as ethylene and propylene at the site near the German border, employs 350 Total workers as well as sub-contractors, Sellini said. These chemicals are used to make plastics.

Total has four steam crackers in France, including units at the Gonfreville, Feyzin and Lavera refineries. The company cut jobs at Carling in a plan announced in 2009.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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