Dunkirk falls after battle
Total, the French oil company, bit the bullet yesterday and announced the closure of its refinery at Dunkirk, hoping to bring to an end a political battle with French trade unions over the future of the country’s refining industry.
The company promised to reassign 370 employees at the refinery, but unions protested at Total’s headquarters in Paris over the future of 450 contractors.
According to Total, the closure of Dunkirk was the result of poor demand for oil products and the weak profitability of the refining business. In addition to a promise of no compulsory lay-offs, it said that it would maintain operations at its other French refineries until 2015.
That commitment has prompted industry rumours that Total might sell Lindsey, its British refinery on Humberside, to meet an internal target of reducing its European refining capacity by 500,000 barrels per day.
Europe is awash with oil products because of recession and competition from new refineries in the Middle East and in Asia that were built with export potential. Britain has been at the sharp end of the turmoil in refining and half the country’s plant has been sold or closed over the past decade.
Petroplus’s Teesside refinery, which provided feedstock for the petrochemical complex at Wilton, has been closed since November, while Shell has been in talks since October with Essar, the Indian conglomerate, to sell its refinery at Stanlow, in Cheshire.
Industry analysts believe that the net profit margin of refining a barrel of crude oil is now zero or negative, strengthening the argument for closures. Included in the Shell-Essar talks are two German refineries at Hamburg and Heide.
Meanwhile, Ineos, the debt-laden private chemicals company, has had discussions with PetroChina over an investment at its Grangemouth refinery on the Firth of Forth.
Carl Mortished, The Times 09-03-2010
Writers name
Carl Mortished, The Times
Advertisers Company:
Consort24
Advertiser's website:
http://www.consort24.com