Reuters: Regulatory News: UPDATE 1-Total CEO - more European refineries will close

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UPDATE 1-Total CEO - more European refineries will close Jun 2nd 2013, 19:49 Sun Jun 2, 2013 3:49pm EDT PARIS, June 2(Reuters) - Total and other oil majors will shut down more refineries in Europe over the next few years due to the broad consensus for lower CO2 emissions and fuel consumption, the French company's chief executive said on Sunday. Total CEO Christophe de Margerie declined to say which refineries Western Europe's third-largest oil company could close. But he did tell the interview with RTL radio and LCI television that he believed there was too much refinery capacity in France, comments which could worry labour unions and government officials. Europe's refining industry is struggling with declining margins for its aging plants, which require heavy spending on maintenance, while demand is weak as the region's economies slump. The pressures have led to four plant closures in 2012 and another three announced so far this year. Asked if more closures would follow in Europe in the next few years, Margerie said: "Of course more refineries will shut down because consumption will shrink. Everybody wants consumption to shrink, public authorities, Europe and ourselves. If we all decide to cut consumption, we have to cut production." French President Francois Hollande said on Thursday he was sticking to a target of reducing unemployment by year-end, after fresh data showed that the number of jobless hit a new all-time high in April. Some 3,264,400 were seeking work in April after two full years of monthly rises in the number unemployed. Asked if Total itself would close down refineries in Europe or France, he said: "Of course that will happen because in France as everywhere else we will continue to reduce consumption ... that will lead to a cleaner environment." PLEDGE France's largest oil producer, Total pledged in 2010, when it shut a refinery in Dunkirk, not to close any other refinery in France before 2016. Margerie said the company would need to discuss the question of refining capacity with its social partners before making any decisions. "The first debate, which is an important one, is whether there is too much refining capacity in France," the outspoken 61-year-old said in the interview. "I say yes. They (the unions) say no. Or rather some say no and others say yes." Total's strategy is to focus on investing in its larger, integrated petrochemical and refining plants to make them more efficient, while keeping a lid on investments at its other European refineries. The French company cut its European refining capacity by 500,000 barrels per day between 2007 and 2011 and has said it aims to cut the region's refining and petrochemical production even more, while it wants to grow in Asia and the Middle East. France's Rouen commercial court rejected in April two takeover offers for a French refinery owned by Swiss refiner Petroplus, a decision that led to the liquidation of the plant. "Our goal is not to shut down refineries, it is to keep them, but for them to be profitable," Margerie said. Total agreed on Wednesday to pay $398.2 million to settle U.S. criminal and civil allegations that it paid bribes to win oil and gas contracts in Iran, while a French prosecutor recommended that the company and its chief executive be brought to trial in its home country. Margerie said he could not comment on the U.S. deal but added about the French prosecutor's recommendation: "We will take the time to explain that what we did was absolutely not illegal." Link this Share this Digg this Email Reprints

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