Petroplus Administrators Reject All Bids for Normandy Refinery
The administrators of Petroplus Holding AG’s Petit-Couronne oil refinery in Normandy rejected all five bids for the site and started proceedings to fire workers before closing the plant for good.
The bidders failed to provide proof of their ability to pay for crude, refinery operations, investment to modernize the site and job security for workers, according to a statement from the administrators and management of Petit-Couronne.
The bids were from Terrae International SA of Switzerland, Murzuk Oil of Libya, Arabiyya Lel Istithmaraat of Egypt, FJ Energy Group of Cyprus and Damanapol International, a French company, the statement said.
The administrators examined the bids today to decide whether any were worthy of transferring to a court in Rouen that’s been charged with deciding the 154,000-barrel-a-day refinery’s future after Zug, Switzerland-based Petroplus filed for insolvency in January 2012.
Yesterday, Industry Minister Arnaud Montebourg said offers from Terrae and Arabiyya Lel Istithmaraat “appear serious and financed.” The government has worked with the potential acquirers to “save jobs and refining capacity,” he said.
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 earlier today 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. “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 had said.
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.
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