France Digs In to Endure Oil Strike With Release of Fuel Reserve

FRANCE-LABOUR-POLITICS-PETROL-STRIKE

Workers on strike block the access to the harbour of Saint-Nazaire, western france, on May 24, 2016 to protest against the government's planned labour law reforms.

Photographer: Jean-Sebastien Evrard/AFP via Getty Images
  • Minister says country has enough to last weeks of protests
  • Exxon says Gravenchon plant operating normally, shipping fuel

The French government said it was prepared to endure weeks of strikes at refineries and began releasing strategic oil reserves to help ease nationwide fuel shortages.

While panic-buying by motorists drove demand to three times the normal level Tuesday, France has enough stocks even if the strikes persist for weeks, Transport Minister Alain Vidalies said on iTele. The problem isn’t about supply but about delivery, he said.

Oil companies have mobilized hundreds of trucks to ship diesel and gasoline around the country since the start of the week as filling stations ran dry after all the nation’s refineries experienced disruptions or outright shutdowns. By Wednesday Exxon Mobil Corp. reported that its Gravenchon plant was operating normally and able to transport fuel while elsewhere strikers have blocked refineries to try to bring shipments to a halt.

Workers are protesting against President Francois Hollande’s plans to change labor laws to reduce overtime pay and make it easier to fire staff in some cases. While the government has watered down its proposals since first floating them in February, unions are calling for them to be scrapped altogether. The new law will not be withdrawn and police will continue to ensure access to fuel depots, Prime Minister Manuel Valls told Parliament Wednesday.

Refineries Halted

Total SA’s Feyzin refinery near Lyon and its Normandy plant have stopped production. La Mede was working at a lower rate Wednesday, while the facilities at Grandpuits near Paris and Donges close to Nantes will come to a complete halt later this week, according to a company statement.

Total may reconsider a plan to spend 500 million euros ($557 million) to upgrade the Donges facility as workers take the plant “hostage,” Chief Executive Officer Patrick Pouyanne said Tuesday. He urged motorists not to rush to gas stations and create an “artificial” shortage.

Some 348 of Total’s 2,200 gas stations ran out of fuel and 452 faced partial shortages as of Wednesday morning, the company said. The figures are little changed from Tuesday.

About one in five of the country’s 12,200 stations were facing shortages Tuesday afternoon, the government said. The country has used three days of emergency reserves out of 115 days worth of supply, according to Vidalies, the transport minister.

While Exxon’s Fos-sur-Mer refinery in southern France is still operating, fuel deliveries from the plant remain suspended, Catherine Brun, a company spokeswoman, said Wednesday. Exxon’s Gravenchon plant in northern France is working normally and shipments continue, she said.

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