Refining: when Europe is losing ground – Les Echos

Total Thursday announced the conversion of its refinery in La Mede. Between 2008 and 2013, the die processing capacity has decreased by 15% on the Old Continent.

The conversion of the Total refinery in La Mede marks a new stage of the crisis refining in Europe. For ten years, the sector is under stress. Between 2008 and 2013, the crude oil processing capacity on the Old Continent has fallen from 700 to 600 million tonnes (-15%), through closures, mothballed or capacity reductions, according to the Data UFIP (French Union of Petroleum Industries).

A total of 15 refineries were affected, including 5 in France: in addition to the closure of Dunkirk in 2010, Total has also reduced by 25% the capacity of Gonfreville (Haute-Normandie) in 2012; and the Swiss Petroplus closed its two refineries in France, Reichstett (Bas-Rhin) and Petit-Couronne (Haute-Normandie), in 2011 and 2013. Finally, the chemist LyondellBasell announced in April that its refinery in the Etang de Berre (Bouches-du-Rhône) does not restart.

“Europe suffers a sharp decline in demand”

Closing the Mede will not suffice to absorb European overcapacity. “We believe that there is still unused 150 million tons,” according to the president of the UFIP, Francis Duseux. Of the 79 refineries that turn again, 20-30 could disappear in 2030-2040. “Europe suffers a sharp decline in demand for petroleum products, and we can expect that the latter will continue,” said Francis Duseux.

France penalized because it produces too much petrol

The old continent is also facing competition from ultramodern plants built in the Middle East or India, or to that of petroleum products from the United States, related to the expansion of overseas shale gas. France is also penalized because it produces too much petrol, while diesel will represent 75% of consumption. Result, even if refining margins are uploaded recently (they were $ 47 dollars in the first quarter with Total), the sector remains a structural deficit. The UFIP estimates its losses in France and 700 million euros per year.

What are the next refineries on the list? Several closures or capacity reductions have already been announced. The American Murphy Oil will close its refinery in Milford Haven, Wales in Britain who treated 130,000 barrels per day (bpd). The Libyan group Tamoil has even announced the closure of its plant in Collombey, Switzerland (155,000 bpd). ENI will convert its Sicilian plant Gela (129,000 bpd). The Italian group had said in July that it intended to reduce its capacity by 50%. Furthermore Gela, Talente sites and Livorno were in the crosshairs. Finally, Total announced in February a halving of the capacity of Lindsey by the end of 2016, for 180 job cuts at 580.

AF