Total to merge refining and petrochemicals – report
21:33, Thursday 25 August 2011
PARIS (Reuters) – French oil company Total is preparing a re-organisation to merge its refinery and petrochemical activities, the newspaper Les Echos reported, citing several trade union sources. The re-organisation, which entails making the distribution of petrol independent from refineries, is expected to be announced during the autumn and seeks to extract cost savings, Les Echos wrote in an early release of its Friday edition.
At Total, no one was immediately available to comment.
Total petrochemicals has nearly 6,000 employees worldwide, according to the company’s website, and the division’s main product is polymers, used to make plastic products. The refinery business makes fuels or liquefied petroleum gas.
The re-organisation would be Total’s biggest since the world’s fifth-largest private-sector oil company created specialty chemical maker Arkema in 2004, Les Echos said. It would also follow U.S. rival Chevron Corp , the world’s third-largest private-sector oil company, which combined its chemicals and refining operations last year before a restructuring in which it cut 2,800 jobs and sold its British refinery to Valero Corp .
Mike Wirth, head of the combined Chevron downstream division, told Reuters in May he expected this year’s rise in refiners’ profit margins to be brief because of the growing amount of surplus refining capacity worldwide.
(Reporting by Caroline Jacobs in Paris. Additional reporting by Braden Reddall in San Francisco. Editing by Robert MacMillan)