Brussels, 25 September (Argus) — The commercial case for keeping the 146,000 b/d Petit Couronne refinery in France open is increasingly tenuous.

The administrators are due to make an announcement on the fate of the site on 2 October. But previous deadlines have been repeatedly pushed back, an indication of the dubious commercial rationale for restarting operations at the plant, which was shut in after owner European refiner Petroplus filed for insolvency in January.

Two bidders remain in talks with the administrator of the plant over a possible sale — Tamoil founder Roger Tamraz's Netoil, and oil and gas exploration and development firm Alafandi Petroleum Group. Both have placed bids for the site but the plant is old and has suffered under-investment. It would be surprising if anyone would be prepared to pay the millions of dollars needed to upgrade the plant from their own pocket.

Even people close to the plant when it was operating are sceptical. “There is no reason other than a political one for keeping the refinery open,” said one. “The site should be closed.”

And the political imperative has been to the fore. After a month of strikes across the French refining sector in late 2010, governments have been keen to maintain industrial peace. The administration of Nicholas Sarkozy ensured the plant was not definitively closed in the run up to the presidential elections of earlier this year, working with Shell to put a temporary third-party crude supply arrangement in place while the administrators looked for a buyer.

Sarkozy lost the presidential election but his successor Francois Hollande is equally keen to avoid further unrest in the sector. And a further embarrassment is that Petit Couronne is located in the Seine-Maritime part of northern France that was represented by Hollande's foreign minister Laurent Fabius before he took up his current post.

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