French refineries slow, may shut down over strike

Refineries at Fos and Lavéra, France, will begin to shut down Mar. 30 if the strike that started Mar. 14 is not lifted, said the oil companies' trade group Union Française des Industries Pétrolières (UFIP).

Doris Leblond
OGJ Correspondent

PARIS, Mar. 30 -- Refineries at Fos and Lavéra, France, will begin to shut down Mar. 30 if the strike that started Mar. 14 is not lifted, said the oil companies' trade group Union Française des Industries Pétrolières (UFIP).

Negotiations that began early Mar. 29 between regional authorities, Gaz de France, and the CGT trade union strikers are continuing, a CGT union leader told OGJ.

The strike has idled some 60 vessels outside the Fos and Lavéra ports in southeastern France, and it appears that shipping rates in Europe could be soaring on the back of lifting shortages.

The three regional refineries—Esso's Fos-sur-Mer, Ineos' Lavéra, and Total's La Mède and Feyzin, its refinery in the Rhône Valley—as well as two refineries at Cressier, Switzerland, and Karlsruhe, Germany, supplied by pipeline from the ports have reduced production and are struggling to stockpile products. LPG is already being flared.

Shutting down a refinery is costly, and putting it back on stream requires a week. UFIP said the cost to industry so far can be estimated at €25 million, including idled tankers and refinery slowdowns.

Shell's refinery at L'Etang-de-Berre is as yet unaffected as it will complete a 3-week turnaround by week's end.

UFIP considers the consequences of the strike "disproportionate" to its cause, which in no way is related to the oil industry, and it fears for the impact on the image of France's leading oil port, the Port of Marseille, and its region as well as on investment decisions.

It points out that the oil business accounts for 60% of the Marseille port's traffic. The refining and petrochemical industry in the region processes 31% of the crude refined in France, employs 3,400 people directly and 11,000 indirectly. In 2006, the oil industry invested €376 million in port activities.

The strike was sparked by the CGT union's demand that its agents be involved in the loading and unloading of LNG carriers that will arrive at Gaz de France's Fos Cavaou terminal when it comes on stream at yearend. For security reasons Gaz de France remains firm in its refusal, saying these sensitive operations can be handled only by its own trained personnel and under a single command.

Gaz de France in a press release indicated it would let the Marseille Port agents handle piloting and docking of the carriers, pointing out that this will provide the agents with much increased employment, as over 100 extra vessels will be docking from 2008 onwards.

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