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EurOil COMMENTARY EurOil

Source: Total.

and operates 150 filling stations in the UK. The their profitability was also hurt by fuel strikes
deal also covers the transfer of Lindsey’s associ- across France in January.
ated logistic assets. After a wave of refinery strikes in 2010, Total
Commenting, Prax said the deal would vowed not to shut down any of its refineries until
“place the refinery at the heart of [its] strategic 2015. That year it converted the 160,000 bpd La
network.” Mede plant into a biorefinery.
“The Prax Group’s long-term strategy is to be European refining margins improved
fully integrated across the oil value chain from after the 2014 oil price crash, and so it was not
upstream to downstream,” CEO Sanjeev Kumar in Total’s interest to close down any plants.
said. Prompted by current conditions, however, it is
Built in the late 1960s, Lindsey employs now considering the shutdown of the 93,000
around 400 people, with around 350 contrac- bpd Grandpuits refinery, in part because of
tors currently working on site. Total has been its long-standing problems with the pipeline that
owner since the very beginning. delivers its crude feedstock.
Total’s plans at Lindsey and the SEAL gas Grandpuits can only run at 70% capac-
pipeline follow a deal it agreed last summer to ity because of the pipeline’s reduced pressure.
sell a package of non-core upstream assets in the Meanwhile, a crude distillation unit (CDU) at
UK to Norwegian private equity fund HitecVi- Total’s 240,000 bpd Gonfreville refinery has been
sion and Omani oil group Petrogas for $635mn. offline since a fire in December, while a similar
But this May, Total revealed that Petrogas had unit at the 105,000 bpd Feyzin plant has not been
withdrawn from the transaction and that it had working since February, because of extended
renegotiated terms with HitecVision alone. Clo- maintenance.
sure is expected in the third quarter. Faced with the prospect of declining French
Most of the majors have been scaling back and European fuel demand over the long term,
their operations in the UK in recent years, so as a result of improved efficiency and growth in
they can focus on larger-scale and higher-mar- the use of electric cars and other alternatives,
gin projects elsewhere. Total could decide to scale back its refining
capacity even further in the next few years.
Refining plans It is not the only European refiner consid-
The outlook is also grim for Total’s five refineries ering such as step. Oil trading giant Gunvor is
in France, which have traditionally struggled to weighing up plans to mothball its 107,500 bpd
compete with imports. Besides the pandemic, refinery in the Belgian port of Antwerp. ™

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