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Reuters: Unions key for French refinery sales-Shell exec

Fri Apr 20, 2007 1:00 PM BST

SINGAPORE, April 20 (Reuters) – The agreement of powerful French unions is key to oil major Royal Dutch Shell’s possible plan to sell off three refineries in the country, the company’s top downstream official said on Friday.

Shell has said it is reviewing a number of refining and petrochemicals feedstock assets, including the three French sites, amid moves by a number of oil majors including BP to cut exposure to the cyclical business for fear that new plants in Asia and the Middle East will drive down margins from 2010.

Rob Routs, Shell’s Executive Director Downstream, told Reuters in an interview that he hoped the review could be completed by the end of the year.

“There is a structure of unions… that have a lot of impact on this process,” he said. “We’ve told the unions very clearly we don’t have any investment plans in France anymore. A new buyer will be much more ready to invest there than we are.”

The Business magazine in the UK reported in November that the sale could raise up to $4 billion for the world’s third-largest listed oil firm by market value.

The deal would shave another 7.5 percent off Shell’s global refining assets, which totalled just over 4 million barrels per day (bpd) in 2006, down more than 300,000 bpd from four years earlier.

Shell’s 142,000-bpd Petit Couronne refinery is its largest in France and accounts for about 7 percent of the country’s refining capacity. Shell also operates the 80,000-bpd Berre L’Etang and 77,000-bpd Reichstett plants.

Russia’s biggest firm LUKOIL , which has expressed an interest in buying European refineries, said in January it was not interested in buying the French plants. Brazil’s state oil firm Petrobras — anxious to secure demand for its rising crude production — had no comment.

Analysts have also mooted Swiss-based refiner Petroplus , which bought Exxon Mobil Corp.’s 110,000-bpd Ingolstadt last year for $630 million and plans to buy BP’s Coryton plant for $1.4 billion, and Kuwait Petroleum International, which last year scrapped plans to sell its Rotterdam refinery.

Shell is also reviewing the Yabucoa petrochemical feedstock plant in Puerto Rico, which has a capacity of 79,000 bpd.

© Reuters 2007. All rights reserved.
 

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