Europe oil refining crisis to last: lobby

The European oil refining industry is in deep crisis and governments should brace for more problems, a top French oil industry lobbyist said on Wednesday as France scrambled to find a buyer for a site faced with closure.

"European refineries are going to continue to suffer, it is something that leaders should understand," said Jean-Louis Schilansky, head of France's UFIP oil business lobby at a news conference.

The stark warning came as a French administrators began considering five offers to save a bankrupt oil refinery northwest of Paris from closure.

Run by Petroplus which has been drastically slashing production across Europe, the site employs 470 people and is one of many refineries threatened with closure due to overcapacity and increasing competition from US players riding a shale gas boom.

Schilansky said Europe's refining industry had been flailing for years due to shrinking local demand and new players mushrooming in the US as well as India where several important plants have begun operations recently.

Keeping this in mind, "we continue to forecast that in 2015, there will still be an 8 to 10 percent overcapacity in the European refining system," Schilansky said, adding that the shake-up in Europe "was not over."

The lobbyist said that since 2009 four refineries had been lost in France alone and that he hoped the industry there would stabilise.

"If there are still refineries to be closed, there are other countries where closures can take place other than France," he said.

The French government said Tuesday it was working with prospective buyers of the Petroplus plant, including several from the Middle East, and would try to find a solution that preserved jobs and offered long-term prospects.

The Petit-Couronne plant outside Rouen was sold in 2007 to Switzerland's Petroplus by Anglo-Dutch company Royal Dutch Shell.

But the Petroplus group has been mired in a deep crisis since 2011 when it lost crucial bank financing, forcing it to close plants and slash operations.