April 3, 2010 at 11:46 pm #2718
Petroplus Joins Others in European Refinery Sales (Update1)
By Jessica Resnick-Ault
April 1, 2010 (Bloomberg) — Petroplus Holdings AG, Europes largest independent refiner, said it may sell its Reichstett refinery in France, joining other oil companies seeking to divest European refineries.
Royal Dutch Shell Plc and Chevron Corp. are trying to sell European plants after a drop in refining profit margins. Paolo Scaroni, chief executive officer of Italian oil company Eni SpA, said such sales are impossible after margins fell to a 15- year low in December.
The Reichstett plant was closed in the fourth quarter because of a pipeline break, contributing to the companys horrible results for the period, Petroplus Chairman Thomas OMalley said in a February conference call with investors.
Based on required future capital investments at the site, Petroplus management will evaluate strategic alternatives, including the potential sale of the refinery, the company, based in Zug, Switzerland, said in a statement today.
The plant gets crude from a single pipeline, making it vulnerable to supply disruptions. The refinery had a cash drain of $95 million in 2009, Chief Financial Officer Karyn Ovelmen said in a conference call in February.
OMalley said last week he is interested in buying U.S. refineries to take advantage of low prices there. OMalley said he is currently bidding on Valero Energy Corp.s shuttered Delaware City, Delaware, refinery on the U.S. East Coast.
Petroplus has already stopped refining at its Teesside refinery in the U.K. due to low margins.
Royal Dutch Shell, based in The Hague, has three European refineries on the block. Chevron, based in San Ramon, California, said last month that it would consider a sale of its Pembroke refinery in the U.K.
To contact the reporter on this story: Jessica Resnick-Ault in New York at email@example.com. Last Updated: April 1, 2010 15:06 EDT
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