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French refining site Petroplus awaits fate

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(Globalpost/GlobalPost)

A bankrupt oil refinery northwest of Paris called Petroplus employing 470 people is the latest focus of French national anxiety over factory closures and the role of investors and the state, with bidders facing a deadline on Tuesday to propose new investment to keep the plant alive.

There has been vague talk of the French state taking a minority stake, and of possible bidders from Dubai, Libya or Iran.

Investors have until Tuesday to make bids for the business, and the Minister for Industrial Regeneration Arnaud Montebourg said on RTL radio early in the day that the government expected several offers.

But late on Monday, officials at the office of Prime Minister Jean-Marc Ayrault had played down the chances of finding a buyer following talks between the prime minister's advisers and representatives of the workers, saying the possibility was "limited".

The Petroplus problem has been a thorn in the side for more than a year first for the centre-right administration overseen by President Nicolas Sarkozy and now for the Socialist government overseen by President Francois Hollande.

The site at Petit-Couronne opened in 1929. The most-recent parent company Petroplus filed for bankruptcy on January 24, 2012 and the refinery was placed in administration on October 16 with arrangements to maintain activity for two months.

The case is emblematic of the struggle of the government to prevent the closure of industrial sites, fight unemployment, cut a big public deficit and increase the competitive position of struggling French industry.

Some bigger cases in the background involve thousands of planned job cuts at carmakers Peugeot Citroen and Renault, and the jobs of about 750 people employed at blast furnaces in northern France being closed by steel group ArcelorMittal.

Montebourg said Tuesday that the state would likely take a minority stake alongside any buyer "because very large amounts of capital are needed for reinvestment and to make this refinery efficient."

The minister, who has been highly critical of the effects of globalisation and is promoting a "buy French" campaign, was put on the back foot over the recent and highly controversial ArcelorMittal case, having argued unsuccessfully for nationalisation of the steel activities concerned and having held out the possibility of a buyer although none materialised.

Several unions had raised the possibility of nationalisation for the Petroplus site in recent months but Hollande, who visited the site in January, said that the state would do its duty but could not take over the business.

-- Very difficult case --

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After the meeting at the prime minister's office late on Monday, the spokesman for the various unions, Yvon Scornet, had mentioned the possibility that a buyer from Libya would come forward, mentioning a company called Murzuk from a town of the same name.

But he also said that the government had said it was talking to British-Dutch oil group Shell, the original operator of the refining operations which it had sold to Petroplus in 2007.

Trades unions held that the most credible potential buyer remained NetOil based in Dubai and controlled by Lebanese-American businessman Roger Tamraz. Scornet said it was possible that Tamraz might be interested in association with other parties.

The representative of NetOil in France, Dominique Paret, told AFP that the company intended to make an offer, but on Friday various sources in Paris had agreed that this solution seemed unlikely.

Union representatives have also spoken of a possible new bidder, and have strongly criticised the government, saying it had discouraged an Iranian company from making a bid.

The chances of an Iranian company being accepted are complicated by international sanctions against Iran in retaliation for that country's nuclear programme.

Scornet said that he was sceptical about a solution involving possible Iraqi interests and involving Jabs Gulf Energy Ltd.

The Prime Minister's experts were gloomy after the meeting on Monday. "It is a very difficult case on which the state has done a lot of work, but the chances of success are limited," they said.

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http://www.globalpost.com/dispatch/news/afp/130205/french-refining-site-petroplus-awaits-fate