UpdateLyondellBasell's Berre refinery restarts as strike ends

10 October 2011 12:57  [Source: ICIS news]

(adds confirmation from LyondellBasell and updates throughout)

LyondellBasellLONDON (ICIS)--LyondellBasell’s refinery at Berre L’Etang, France, restarted on Monday after employees agreed to return to work following a 10-day strike, the Netherlands-headquartered petrochemical producer said.

LyondellBasell’s management decided to restart the plant for three months until 31 December before having it mothballed for up to two years, allowing time to find a possible buyer for the facility, according to company spokesman David Harpole.

“Start-up operations began on Monday. Refining, olefins and polymers units at Berre will be restarted over the next few days,” said Harpole.

Industrial action was initially triggered when LyondellBasell announced it intended to close its 105,000 bbl/day refinery at Berre L’Etang, having failed to find a buyer for the asset. About 370 jobs would have been affected. The strike action forced LyondellBasell to shut its refinery and petrochemical site on 27 September.

However, an agreement, reached on Friday night in Paris in joint discussions between refinery management and union representatives, was approved by employees in a special assembly on Saturday, Harpole said.

“As part of the agreement, the refinery will be mothballed as of 31 December 2011. The consultation process [with works councils] will begin in January 2012 instead of October 2011,” he added.

“The refinery could be mothballed up to two years. We have not reopened the sales process. However, should a viable offer for the refinery be received during the mothball phase, we could proceed with a divestiture. We have no plans to reopen the refinery. This decision was not made to wait for market conditions to improve,” Harpole said.

So far, the company has not received any expression of interest, he added.

Gilles Hellier, a spokesperson for French union group CGT, said the unions were happy that the plant would be restarted in 2013 after being mothballed.

“For us it is a great victory, because usually in the closing of refineries, we have never seen the process reversed,” he said.

However, he added that there was still concern that the mothballing could lead to downsizing and job cuts.

Harpole did not comment whether worker's jobs would be affected by the mothballing next year.

“It is premature to comment on how employment would be impacted. Our objective in shutting down the unprofitable refinery is to preserve the 900 jobs that support the core petrochemical assets at Berre,” he said.

The refinery is operated by LyondellBasell subsidiary Compagnie Petrochimique de Berre. The petrochemical assets include a steam cracker and worldscale polypropylene (PP) and polyethylene (PE) plants, owned and operated by another subsidiary.

LyondellBasell forerunner Basell agreed at the end of 2005 to buy the former Shell refinery at Berre L’Etang for $700m (€525m) to provide greater upstream integration for its co-located petrochemical assets.

LyondellBasell said in May this year that it was seeking a buyer for the refinery. Analysts estimated at the time that the company might gain $500m from the sale.

The site is also host to several other chemical companies, and is one of the largest petrochemical complexes in southern Europe.

Additional reporting by Leigh Stringer

($1 = €0.75)

For more on LyondellBasell visit ICIS company intelligence


By: Franco Capaldo
+44 (0)20 8652 3214



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