Continued strike action in France paralyses refineries

15 October 2010 12:23  [Source: ICIS news]

LONDON (ICIS)--Strike action by French workers continued on Friday, forcing the country’s refineries to operate at minimum throughput levels or freeze production altogether, which has caused feedstock issues for chemical producers.

As a national strike over President Nicolas Sarkozy's pension reforms rolled into its fourth day and protests at Marseille’s Fos-Lavera oil port entered its 19th day, a shortage of crude supplies has paralysed all 13 refineries in France and was now affecting downstream users.

French oil major Total confirmed that it was still in the process of stopping production, which takes a few days, at all of its operating refineries in Gonfreville, Feyzin, Donges and Grandpuits, after workers voted in the morning to again join the national rolling strike.

Total spokesman Michael Crochet-Vourey said the situation had not changed but added that it was not experiencing difficulty supplying its customers.

Total was forced to begin a production shutdown at its refinery at La Mede in southern France on 10 October due to constraints on crude supplies caused by striking workers at the key Fos-Lavera oil port.

Total’s Dunkirk refinery was also on strike for a third day, although it has not produced fuel products since 8 March.

ExxonMobil’s merged refinery at Port Jerome-Gravenchon and its plant at Fos-sur-Mer were also both on strike, company spokesperson Catherine Brun confirmed.

Product supplies from ExxonMobil’s refinery at Fos-sur-Mer have been blocked and the facility was still running at minimum throughput levels due to crude supply issues caused by the Marseille port industrial action.

Brun said that workers at the group’s Port Jerome-Gravenchon planyt voted to join the strike on the evening of 14 October, however, she was unable to comment whether production at the plant had been affected.

LyondellBasell’s refinery at Berre L'Etang was not on strike, although it was still forced to begin a production shutdown on the night of 14 October due to crude supply issues.

However, LyondellBasell spokesman David Harpole said that chemical operations at the same site were continuing to operate.

Harpole would not comment on how long LyondellBasell’s chemical plants at Berre L'Etang would be able to carry on making product with its refinery shut down.

Petroplus and INEOS were both unavailable to comment on the situation.

A variety of chemical producers were beginning to feel the adverse effects of the the lack of refined feedstock, sources said. Some producers have already begun to cut down chemical production as availability of supplies has diminished.

On 14 October, French chlor-alkali producer Arkema announced that despite recently restarting production of both caustic soda and polyvinyl chloride (PVC), it was forced to maintain its original declaration of force majeure in place at all four of its sites, as the company was unable to move PVC feedstock vinyl chloride monomer (VCM) between its facilities due to the strikes.

Other chlor-alkali producers have also expressed concerns that if the strike were to continue, refineries could be affected in the coming days, severely limiting the amount of feedstock ethylene.

Arkema also declared force majeure on supplies of oxo-alcohols from its Lavera plant due to a lack of feedstock as a result of the strikes.

However, sources within the European naphtha market said that the ongoing strikes would only have a minimum impact, adding that only players directly involved with plants in France might be nervous.

On 13 October, the International Energy Agency's (IEA) monthly oil report said that major strike action in France could result in a shortage of European gasoil supplies and higher spot prices.

French government ministers have urged drivers not to undertake panic buying at the petrol pumps and have offered reassurances that there was no threat of an imminent fuel shortage, as the country had enough petrol to last at least a month.

Additional reporting by Stephanie Wilson, Libby George, Amandeep Parmar and Jane Massingham.

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By: Franco Capaldo
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