Petroplus Falls After Posting Loss, Halting Teesside (Update2)
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By Nidaa Bakhsh
Nov. 5 (Bloomberg) -- Petroplus Holdings AG, Europe’s largest independent refiner by capacity, fell to a two-month low in Zurich trading after reporting a third-quarter loss and suspending operations at its Teesside refinery in the U.K.
Petroplus fell 3.1 percent to 22.44 Swiss francs at 5:30 p.m. local time after slumping as much as 8.5 percent to 21.20 francs, the lowest price since Aug. 21. The closing price values the company at 1.94 billion francs ($1.9 billion).
The global recession has eroded demand for fuels, prompting European refiners including Total SA and Royal Dutch Shell Plc to lower operating rates, idle some plants and sell others in a bid to cut costs and maintain profit.
Petroplus has decided to suspend oil processing at its 117,000-barrel-a-day Teesside refinery, Chief Executive Officer Jean-Paul Vettier said today in a statement. The site will continue to run as a terminal and storage facility, he said.
The Zug, Switzerland-based company said in February it was seeking a buyer for the facility and would convert it into storage or a terminal if one wasn’t found by the end of the year. The suspension follows the sale of Petroplus’s Antwerp Processing Facility to Vitol Group and the halt of its BRC refinery in Belgium amid declining processing margins.
Below Capacity
“The European refining environment was particularly challenging in the third quarter,” Chief Financial Officer Karyn Ovelmen said in the statement. The company ran its plants below capacity as fuel demand remained depressed, Vettier said.
The net loss shrank to $259.4 million in the quarter from $445.6 million a year earlier as Petroplus benefited from a $10 million gain in inventory value, it said in the statement. That compares with a $645 million inventory loss last year as oil prices slumped, according to Martin Flueckiger, an analyst at Helvea SA in Zurich.
Crude futures sank 68 percent in the second half of last year as the economic slowdown curbed fuel consumption. Oil has since rebounded 79 percent in New York.
Petroplus sold its Antwerp facility to Vitol last month for $25 million excluding inventories, the companies said Oct. 23. Units at the complex include a 22,300-barrel-a-day gasoil hydrotreater and a bitumen facility with a capacity of 875,000 metric tons a year.
BRC, Coryton
The company shut its 110,000-barrel-a-day BRC refinery in Antwerp “principally for economic reasons” during the third quarter, it said in the statement, adding that the plant is “currently running consistent with plan.”
It also halted its 172,000-barrel-a-day refinery at Coryton in southeast England at the end of the quarter, extending maintenance by 20 days to 25 days until early December.
Petroplus shut its 85,000-barrel-a-day Reichstett facility in France in September after an oil-supply pipe broke. Most of the maintenance at Reichstett planned for the second quarter of next year has been brought forward to this quarter to coincide with the halt, Petroplus said, adding that the plant is expected to be operational at the beginning of December.
A fluid catalytic cracker for gasoline production will be shut in the first quarter of 2010, Petroplus said on a conference call. The refinery will continue to operate during the halt, Ovelmen said on the call.
Other refiners in Europe have also suffered from the economic decline. Total, Europe’s largest integrated refiner, operated its plants at 82 percent of capacity last quarter, compared with 92 percent a year earlier. The Paris-based company said yesterday it’s considering reducing European refining operations because profit margins remain narrow.
Shell has said it’s in exclusive talks with India’s Essar Oil Ltd. for the sale of two refineries in Germany and one in the U.K. as it seeks to reduce costs. Shell, Europe’s largest oil producer, is also selling its Montreal East plant in Canada and a stake in a facility in New Zealand.
To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net
Last Updated: November 5, 2009 12:53 EST
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