Bloomberg News

Buyers Plan to View Petroplus Coryton Refinery in Next Weeks

March 27, 2012

Potential buyers for Petroplus Holdings AG’s Coryton (BPCOCRUD) oil refinery in the U.K. will visit the site in the coming weeks, according to a local member of the European Parliament.

“There are a number of interested parties,” Richard Howitt, an MEP for the east of England, said today by phone. “We need to advance the bids.”

Administrators have been working for weeks to secure the future of Petroplus’s five European refineries after the company filed for insolvency in January. Crude supply has been secured for Coryton and the Petit-Couronne plant in France under so- called tolling arrangements. Gunvor Group Ltd., an energy trader, agreed to buy the Antwerp (BEANCRUD) plant in Belgium this month.

“As with Antwerp, it may be a trader that’s most interested in buying Coryton for its location and storage and distribution facilities,” Roy Jordan, a consultant at Facts Global Energy Inc., said today by phone from London.

The sluggish European economy has reduced demand for fuels, putting pressure on refining margins and leading to the closure of plants owned by Total SA and ConocoPhillips. Lenders to Petroplus froze about $1 billion in loans in December.

“More investment is going to be needed as the economics of the plant don’t look very attractive,” Jordan said.

April Deadline

Coryton is the only Petroplus refinery still operating, supplied under a tolling agreement reached last month with Morgan Stanley, KKR & Co. and AtlasInvest. Under the tolling arrangement, the investor supplies the crude, pays a fee to have it processed and take ownership of the products.

Indicative investor offers for Coryton are to be submitted by April 2, according to Howitt. The 220,000 barrel-a-day facility was scheduled to have a maintenance shutdown in late 2012, the company said in November. “Preparations for the turnaround are continuing,” Howitt said.

Final bids for Petroplus’s Cressier (PECRCRUD) refinery in Switzerland must be submitted by the end of March, Brigitte Umbach-Spahn, the administrator at Wenger Plattner, a law firm in Zurich, said last week in an e-mail.

Petroplus’s Ingolstadt (EXINCRUD) site in Germany stopped processing last month. Investors have expressed interest in buying the refinery, according to a Feb. 8 statement by Petroplus.

Royal Dutch Shell Plc agreed in February to supply crude to the 161,800 barrel-a-day Petit-Couronne (SHPECRUD) plant in France for six months. That plant may start operations by the end of May, according to a union official.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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