23 January, 2012
Several European trade unions, led by the European Mine, Chemicals, Energy Federation (EMCEF), are desperately trying to exert public and governmental pressure to keep the continent’s independent petroleum refiner from going totally insolvent.
In late December, a consortium of 13 banks froze a €1 billion credit line on Swiss-based Petroplus, and immediately the oil company shut three of its five refineries – the Petite-Couronne refinery near Rouen, France, an Antwerp, Belgium, facility, and the Cressier refinery in the region of Neuchâtel, Switzerland.
The publicly-listed company also reduced capacity at its Coryton refinery in Stanford-le-Hope, UK, and at Ingolstadt, Germany. At stake, is 2,500 jobs, with roughly half of that number already idle.
EMCEF General Secretary Michael Wolters said there must be “a financial solution to stop Petroplus from going bankrupt and we call on the responsible national and European authorities” to safeguard these workplaces.
But despite getting a temporary revolving credit loan on 11 January to keep Coryton and Ingolstadt partially operating, time is running short. Late last week, the Zug-based company said it was shutting down refinery equipment at Petite-Couronne and Antwerp, making a sale of these facilities and re-start much more difficult and expensive.
The French unions CGT, CFDT, and CFE/CGC have been actively pressing their government to facilitate a sale, and Unite the Union in the UK has engaged with MEP Richard Howitt for Eastern England to find a solution. The Swiss union Unia has petitioned the federal government to intervene by calling for countries with companies exporting refined petroleum to Europe to pay added duties because generally those companies do not adhere to European environmental standards.
The ABVV/FGTB and ACV/CSC in Belgium and IGBCE in Germany have also stepped up efforts to save Petroplus refineries in their countries.
Of major concern for workers of Petroplus are imports of refined petroleum markets. But also not to be discounted are the faulty decisions made by senior leaders of the company after the private equity firms Carlyle and Riverstone took the company public in late 2006. Carlyle and Riverstone soon after exited ownership with huge dividends.
And then on the front end of the economic collapse, new management paid a premium to buy Coryton from BP and Ingolstadt from ExxonMobil in 2007, and followed in 2008 with purchase from Shell of the French refineries Petite-Couronne and Reichstett near Strasbourg. Petroplus then shuttered Reichstett in 2009. It also shut a refinery in Teeside, UK, in 2009, as exports to the US dwindled and refining margins dropped.
Since the Petroplus went public in 2006 on the Zurich bourse, the company has lost 98% of its value. The crisis the downstream oil producer is now in stands as a stark reminder of inept managerial decisions during an economic downturn, with workers suffering the ultimate consequences.