Petroplus' Germany refinery continues to run, despite insolvency

27 January 2012 16:45  [Source: ICIS news]

LONDON (ICIS)--Petroplus’s 110,000 bbl/day refinery at Ingolstadt near Munich, Germany, continues to run, despite the company’s insolvency filing this week - even though throughput is down to about 30-40% of capacity, an official said on Friday.

Sebastian Brunner, spokesman for Petroplus’s insolvency administrator in Germany told ICIS the administrator would try to keep the refinery running as long as that makes economic and financial sense, while seeking a possible buyer.

A German court appointed lawyer Michael Jaffe as insolvency administrator for Petroplus’s German businesses, including the Ingolstadt refinery.

Jaffe and 25 colleagues are “on site, working under high pressure” to secure the liquidity needed to keep the refinery and Petroplus’s related businesses in Germany operational, Brunner said.

All of Petroplus’s 420 staff in Germany, including the 330 workers at the Ingolstadt refinery, would continue to be paid until “at least” the end of March, he added.

“The workforce is highly motivated,” Brunner said.

Most of the workers are former ExxonMobil employees. Petroplus acquired the refinery in 2007 from the US-based energy and chemicals major.

Brunner said the Ingolstadt refinery is a relatively attractive and modern facility, with strong infrastructure and good transport connections to markets.

“Along with the Coryton refinery in the UK, Ingolstadt was a ‘pearl’ for Petroplus,” Brunner said.

Petroplus’s German business continued to record operating profits in past quarter, despite tough conditions in the European refining industry.

The difficult refining market could make it that much harder for Jaffe and his team to find a buyer, Brunner added.

Still, Jaffe helped rescue many businesses that went insolvent in the 2008/2009 economic crisis, including German textile chemicals major DyStar which was sold to India’s Kiri Dyes & Chemicals in 2010.

Petroplus, for its part, kept Ingolstadt and the 220,000 bbl/day Coryton refinery running even as it shut down refineries in France, Switzerland and Belgium after lenders froze some $1bn (€760m) in credit lines in December.

According to Petroplus’s website, the Ingolstadt refinery was modified and upgraded from 2000 to 2003 through the addition of a hydrogen plant, a catalytic naphtha splitter and other improvements. 

The refinery gets its crude supplies from a 750km pipeline system that ships oil to Germany from a marine terminal in Trieste, Italy.

Meanwhile, in France prosecutors opened an investigation into possible fraud related to Petroplus's filing for “rehabilitation proceedings” in that country this week. Petroplus refutes any allegations of fraud on its part, it has said.

In related news, French news media reported on Friday that Switzerland-based industrial investment group Klesch may be interested in acquiring Petroplus’ 161,800 bbl/day refinery at Petit Couronne near Rouen in northwest France.

Klesch could not immediately be reached for comment.

In 2010, Klesch bought Shell's refinery at Heide, near Hamburg, Germany.

Additional reporting by Leigh Stringer and Franco Capaldo

($1 = €0.76)

By: Stefan Baumgarten
+1 713 525 2653

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