Petroplus' Coryton Refinery Image: Petroplus Holdings
The decision came just days after the company announced it was looking to sell its French refinery, Petit Couronne, and was also considering the future of if its Dutch and Swiss operations.
The situation for the troubled company was not helped by industrial action by workers at the French and Antwerp plants as well as the closure of its Swiss Cressier refinery.
Despite some weeks of negotiations with major lenders, Petroplus finally announced it was filing for insolvency after the talks broke down, with the company stating: "We have worked hard to avoid this outcome, but were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit and refining markets."
The statement continued: "We are fully aware of the impact that this will have on our workforce, their families and the communities where we have operated our businesses.”
The administrators, were called in to handle Petroplus' assets, which include its UK subsidiary, Petroplus Refining and Marketing Ltd, which operates the company's 175,000b/d Coryton refinery and its operations in Teeside. Although the refinery remained operational when receivers KPMG were appointed, the situation poses a major threat to more than 1,000 jobs in the UK alone.
However, there are also concerns about the impact on UK domestic fuel supplies. Coryton provides around 20% of the fuel supplies to the South East of England including London, with BP being its largest customer. In France the situation is reversed, with Petit Couronne producing 1,000b/d of API Group III base oil as well as 6,300b/d of Group I capacity. There is signficant refining competition in Northern France, while Group I product is becoming an increasingly niche commodity although, like its UK counterpart, its diesel and other fuel products may still be in demand.
Published 25th January, 2012
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