Bloomberg News

Petroplus French Refinery May Attract Buyer as Union Holds Fuel

January 24, 2012

Jan. 24 (Bloomberg) -- Petroplus Holdings AG’s refinery at Petit Couronne in Normandy has received several “technical visits” by parties that may be interested in taking over the plant, according to a French union.

“There are signs that there could be interest,” Yvon Scornet, a representative of the CGT labor union, told reporters in Paris today before a meeting with French Industry Minister Eric Besson. Workers at the plant are blocking about 200 million euros ($260 million) worth of refined products as a “guarantee” that they will be paid, he said.

Petroplus, Europe’s largest independent refiner, said earlier today it will file for insolvency after talks with lenders failed. Three of its five European refineries, including Petit Couronne, were already shut and two others, in England and Germany, were operating at reduced capacity.

Petit Couronne supplied oil products for the French market to Royal Dutch Shell Plc, which sold Petroplus the plant in 2008, Scornet said. The refined products stored at the site are the union’s only bargaining chip to ensure workers get paid in the coming months, he said, adding that employees would welcome investors from countries such as Azerbaijan, Brazil and Qatar which have hydrocarbon wealth and little or no crude-processing capacity.

About 550 jobs at Petit Couronne are at risk at a politically-sensitive time ahead of the April, May two-round presidential elections in France. The halt is the fourth suspension in two years and reflects Europe’s declining refining profits. The French site has lost money for the past three years, union workers have said.

European refining capacity could drop by 15 percent to 30 percent through 2030, France’s IFP Energies Nouvelles energy research institute said in a report published today. If Petit Couronne is permanently shut, France will have eight working refineries, down from 24 in 1977.

--Editors: Stephen Cunningham, John Viljoen.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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