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Some 20-25 Europe refineries at risk - French lobby

Monday, 06 February 2012 | 00:00
Some 20 to 25 refineries in Europe are in danger of closing, the head of France's petroleum industry body (UFIP) said, without naming any which will be next on the firing line.
A number of European refiners already have closed since spring 2009 as the industry suffers from overcapacity, exacerbated by falling demand in the region amid an economic downturn and by increasing competition from more modern refineries in Asia and the Middle East.
"We estimate between 20 and 25 refineries out of 115 in Europe are either in the process of stopping operations, on sale or in a very tricky situation," Jean-Louis Schilansky, head of the lobby, told a news briefing.
Europe's largest independent refiner, Petroplus, has become the latest victim, with closures of several plants since December.
"It's an industry in which, if you are not among the best, you face a big risk of bankruptcy," Schilansky said.
Four refineries in France have been closed or mothballed or have halted operations since 2010, and UFIP's head said the European refining industry is far from seeing the light at the end of the tunnel.
In France, the plant closures as well as a 5 percent rise in 2011 diesel consumption have led to a 3 million tonne rise in French diesel imports to 18 million tonnes, or half the country's total diesel consumption.
"The rise in imports is a worry, but we do not have any particular problem in finding the products on the market," Schilansky said.
In 2011 France imported 60 percent of its diesel from Russia and the remainder from the United States, other European countries and India.
"If the (French) Petroplus refinery closed, then we would be structurally short, which would mean that we would be in a situation in which we systematically rely on imports," he said.
PROPOSALS
To help the competitiveness of the French refining sector, the UFIP is calling on the government and candidates for the presidential election in April to progressively harmonise taxes on diesel and gasoline.
The French refining industry was designed to produce mainly gasoline, but the fuel has in the past 10 years come under fire because it emits high levels of carbon dioxide.
The UFIP is also calling for France to put in place minimum operations in oil port terminals during strikes. Schilansky said the five-week strike in ports and refineries at the end of 2010 heavily disrupted fuel supplies and proved their vital role in the French economy.
"If oil ports do not operate, we suffocate the country. The crisis of 2010 has incited us to ask for the creation of a minimum service since we are still exposed to strikes," Schilansky said, adding that the highly unionised Marseille oil port, at the heart of the 2010 strike supplied 38 percent of the country's oil deliveries.
Source: Reuters
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