NetOil, Libya Show Interest for French Refinery

06.11.2012 -

Dubai-based NetOil, led by Middle Eastern businessman Roger Tamraz, has submitted a new offer to take over France's oldest refinery, unveiling a last minute deal with British oil major BP and Hyundai.

Last month, the commercial court in Rouen rejected two bids, including NetOil's, to buy the Petit-Couronne refinery of insolvent Swiss firm Petroplus, threatening to send it into liquidation unless a new offer was submitted by Nov. 5.

Roger Tamraz told Reuters that NetOil had improved its offer, which had been criticised by the court for not providing enough details on financial and technical aspects.

"BP is interested to supply crude, 120,000 barrels per day for a three-year period, that gives us a certain stability in terms of supply," Tamraz said.

"As for Hyundai, they're interested in the upgrading of the refinery, which is very important to increase our refining margins. With two names like that, I don't see why they should hesitate now," he said.

Potential buyers had until 1600 GMT to submit offers on Monday, but Petroplus judicial administrators said in a statement they would consider their merits on Tuesday, when a possible new deadline could be announced.

Industry Minister Arnaud Montebourg said earlier on Monday the government did not support the liquidation of the refinery and asked the court to delay its decision because it had received a non-binding letter of interest from Libya's sovereign wealth fund.

"We don't want the liquidation of this refinery," Montebourg told RTL radio. "I'm going to ask the commercial court today to delay its judgment, to take the time necessary to allow our Libyan friends to invest in this refinery."

The plant's 500 workers and their trade unions had invested much hope in NetOil, but Tamraz said they would be open to a joint deal with the Libyans.

"We welcome Libya, we know them well since we were with them in Tamoil," Tamraz said.

"But they must realise Libya just closed a refinery in Italy with a big fight with the unions there, they put 1,000 people out and they closed a refinery in Switzerland. So let's be a bit logical with what we want to do," he added, referring to the Cremona refinery shut by Libyan energy company Tamoil.

Avoiding job cuts, strikes

The French government has been especially wary of avoiding job losses as unemployment hit a 13-year high and is seeking to prevent the closure of Petit-Couronne from escalating into a disruptive strike movement similar to one in 2010.

The closure of Total's Dunkirk refinery in early 2010, where images of emotional workers had been broadcast on national news bulletins, helped trigger a two-week strike at all of the group's French refineries.

Fuel supplies were also disrupted in the second half of 2010 when a five-week strike in the port and refining sector halted output at French refineries.

A new closure would be hard to swallow for Petit-Couronne's unions, who had secured a temporary reprocessing deal with former owner Shell and returned the plant to profit.

A 24-hour national refinery strike called by the CGT only resulted in a limited action, with only La Mede and Donges refineries cutting output and fuel deliveries.

The French oil major still owns five refineries in France out of the country's eight.