Petroplus French Refinery Gets Two ‘Serious’ BidsTara Patel
Petroplus Holding AG’s Petit-Couronne oil refinery in Normandy attracted five bids, of which two are “serious,” French Industry Minister Arnaud Montebourg said.
Offers from Swiss investor Terrae and Egyptian energy company Arabiyya Lel Istithmaraat “appear serious and financed,” the minister said in an e-mailed statement late yesterday. The government has worked with the potential acquirers to “save jobs and refining capacity.”
A Rouen court had set a deadline yesterday for offers to take over the 154,000-barrel-a-day refinery that was put in administration after Zug, Switzerland-based Petroplus filed for insolvency in January 2012. The plant was the fourth French crude processor to halt operations in about two years as European refining profits dwindled.
France’s refining industry lobby Union Francaise des Industries Petrolieres, or UFIP, said it was “surprised” by the number of offers for the refinery and questioned why large integrated oil companies or refining specialists haven’t come forward to take over the plant.
“Every name that has manifested an interest has some type of link to the Middle East, to oil producing countries,” Jean-Louis Schilansky, head of UFIP, said at a press conference today. “I don’t know their motivation.”
The lobby represents refiners including Total SA and Exxon Mobil Corp. with plants operating in France that would benefit from lower domestic capacity. France now has eight operating refineries compared with 12 in 2009 and 24 in 1977.
“It’s a risky business. Any group that takes over the refinery has to be sufficiently solid from a financial point of view to see the plant through bad times,” Schilansky said. “It would be catastrophic for an investor to have to shut the plant back down.”
The government may take a minority stake in Petit-Couronne to help keep the “money-losing” site running, Montebourg said yesterday.
UFIP said the government proposal shouldn’t be considered state aid and reiterated European refining will continue to face overcapacity this year. French unions have fought to keep the plant open. It employs about 470 workers.
“The government has made jobs a priority, we’re going to hold them to it,” Yvon Scornet, a union representative, said in a statement yesterday.
The Rouen court last year rejected offers from Dubai-based Netoil Inc. and Alafandi Petroleum Group for Petit-Couronne, saying the bidders didn’t respond to questions about their technical and financial capacities. The refinery ran for about six months last year under an agreement with Royal Dutch Shell Plc.