Petroplus in rescue talks as all credit lines get frozen
PARIS SWISS oil refiner Petroplus is talking to an unnamed oil company to secure the new credit lines and crude oil supplies it needs to stave off bankruptcy, its chief executive said.
“Talks with banks are ongoing and we hope that a deal will be reached as soon as possible,” Jean-Paul Vettier told reporters on Thursday on his way out of a meeting with French Prime Minister Francois Fillon in Paris.
“We will do everything we can to avoid bankruptcy... An alternative solution lies in an oil company that could give us oil but also credit lines.
Negotiations are underway,” Vettier said, without naming the company.
Both BP and Total declined to comment.
The European refining industry is struggling with depressed margins as a result of overcapcity and the prospect of a Petroplus demise has already boosted margins, suggesting its peers have little to gain from supporting it.
Shell was not immediately available for comment but rumours that the Anglo-Dutch oil major could enter the fray were sparked after its chief executive said earlier this month that it was “permanently watching the developments at Petroplus.” .
Bankers say Asian oil and gas groups are one of the few potential buyers of European refining assets, as the companies believe they need an international footprint to help their global trading operations.
Essar Energy said such an ambition was behind its purchase of Shell’s Stanlow refinery in the UK last year.
Petroplus has been locked in talks with 13 banks after lenders froze a $1 billion credit facility the group relied on to buy crude oil.
This has forced Petroplus to shut down its low-performing Petit-Couronne refinery in France, which employs 550 people. Vettier said its refineries in Britain and Germany were working at minimum production levels.
Petroplus has some 4.4 percent of total European refining capacity, with plants in Coryton in Britain, Antwerp in Belgium, Ingolstadt in Germany, Cressier in Switzerland and Petit Couronne.
The French government has offered support to the company.
French Energy Minister Eric Besson said on Thursday state aid could take various forms and would not necessarily be financial.
The French government, which experienced its worst ever refining sector strike last year, is keen to see a successful outcome as it heads into presidential and parliamentary elections in the spring.
Data last week showing France’s jobless rate at a 12- year high will likely make the government more anxious to preserve jobs at Petit Couronne.