Petroplus’s French Refinery Not Easily Taken Over, Minister Says
Finding a suitor for Petroplus Holding AG’s Petit-Couronne oil refinery is complicated, according to French Labor Minister Michel Sapin, after Netoil Inc. said it would table a new offer with Korean partners.
“It’s not easy because someone just can’t become a refiner,” Sapin said today on France Inter radio. “We can’t just get anyone to come and refine crude.”
A court in Rouen two days ago placed the 154,000 barrel-a- day plant into liquidation after bids by Alafandi Petroleum Group and Netoil were rejected.
Petroplus, once Europe’s largest independent refiner, has borne the brunt of falling margins due to overcapacity and weak demand that led to its collapse earlier this year. Nov. 5 has been set as the deadline for new offers for Petit-Couronne or the refinery will be shuttered. That would leave France with eight working oil refineries compared with 24 in 1977.
Netoil has decided to make a new offer for the refinery before that deadline, according to a joint statement late yesterday from the company and unions.
Representatives from Korean partners who will “finance the modernization of the refinery” as well as a partner who has signed a tolling contract will appear before the court, the statement said.
Unions have said about 500 workers may lose their jobs at the refinery and 2,000 more are at risk in the region should the plant shut down for good.
APG and Netoil “didn’t respond to questions from the court to show their financial and technical capacities,” Petroplus Raffinage Petit-Couronne, who represent the management, and the administrators said in an Oct. 16 statement. The court said Netoil didn’t provide “necessary guarantees” that operations and worker rights can be continued, Industry Minister Arnaud Montebourg said in an Oct. 16 statement.
Netoil and the unions said in yesterday’s statement that these questions will be addressed before Nov. 5.
Petroplus, once Europe’s largest independent refiner, sought to offload its plants after filing for insolvency in January. Three were sold to trading companies that will keep them operating, while the U.K.’s Coryton site will be converted into storage.
Royal Dutch Shell Plc (RDSA), the prior owner of Petit-Couronne, ran the site from June under a six-month tolling arrangement in which it supplies crude and takes ownership of the products.
Unions have fought to keep it open by lobbying the state to find a buyer.
Netoil planned to upgrade the plant and keep it operating, Chairman Roger Tamraz said Aug. 9. While Europe doesn’t need extra capacity, local suppliers would benefit, he said, citing the proximity to Paris and Charles De Gaulle airport. French margins also began to recover recently as excess supply was cut.
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