France May Take Stake in Petit-Couronne Refinery, Minister SaysTara Patel
The French government could take a minority stake in Petroplus Holding AG’s Petit-Couronne oil refinery in Normandy, Industry Minister Arnaud Montebourg said in a radio interview.
“We are expecting several bids to take over the Petit-Couronne site,” Montebourg said today on RTL Radio. “It’s a refinery that is losing money so the investor would have do so with the state because we are available” for a partnership.
A deadline set by a Rouen court runs out at 5 p.m. local time for bidders to come forward with plans to take over the 154,000-barrel-a-day refinery. The facility went into administration after Petroplus filed for insolvency in January 2012, the fourth French plant to be suspended in about two years as European refining profits dwindled.
French unions have fought to keep the plant running even as the country’s oil industry lobby, Union Francaise des Industries Petrolieres, hasn’t stepped in to defend the plant, which employs about 470 workers. The group represents Total SA, Exxon Mobil Corp. and other companies that operate plants in France.
“The government has made jobs a priority, we’re going to hold them to it,” Yvon Scornet, a union representative, said in a statement.
“To take over a refinery of this size one needs two things, lots of money and oil,” Montebourg said today. “It’s in the interest” of producer countries like Libya who want European market share to have refineries close to distribution.
The government’s role would be one of a “minority” investor to help provide the “large amount” of capital needed to make the refinery profitable, he said. “We would prefer to maintain our refining capacity rather than have to rely on imports.”
The Rouen court last year rejected offers from Netoil Inc. and Alafandi Petroleum Group. Montebourg petitioned the court to delay a ruling on the site’s future as he sought time to examine Libyan interest, which he said today was always a “serious” possibility.
Petit-Couronne operated for about six months last year under a so-called tolling deal with Royal Dutch Shell Plc.
Another former Petroplus plant, in Coryton, England, permanently closed last summer and will be turned into a storage site. The U.K. government didn’t offer to pay to keep that plant running, to the chagrin of the local union. Closing down some refineries should help profit margins for the remaining plants in Europe, according to energy analysts at Barclays Plc.