French union eyes strike over Exxon's petchem closure

  • Spanish Market: Crude oil, Oil products, Petrochemicals
  • 12/04/24

ExxonMobil's plan to close its Gravenchon petrochemical plant in Normandy has raised the possibility of more strike action in France's downstream oil sector.

The CGT trade union has called on all ExxonMobil workers in France to down tools and for the "immediate shutdown of installations". The situation is fluid and it is not immediately clear whether workers will vote on strikes today or if ExxonMobil's operations in France will be stopped.

"We are preparing our plan of action. We will be announcing it very soon," a union official told Argus.

ExxonMobil said on 11 April that the Gravenchon plant has made more than €500mn ($540mn) in losses since 2018 and that it cannot afford to continue operating at such a loss. The firm expects the site to fully close, including the steam cracker and related derivatives units, at some point this year with the loss of 677 jobs.

"The configuration of the steam cracker, its small size compared to newer units, high operating costs in Europe and higher energy prices make it uncompetitive," it said.

The announcement coincided with news that a consortium comprising trading firm Trafigura and energy infrastructure company Entara is in talks to buy ExxonMobil's 133,000 b/d Fos refinery on the French Mediterranean coast.

As well as the direct job losses at Gravenchon, the CGT said there would be an additional loss of work for around 3,000 indirect positions and sub-contractors. The local prefecture of Seine Maritime said the decision will have a "very serious impact on employment and the local economy".

The CGT said upgrades costing around €200mn are needed at Gravenchon, which is "around 0.5pc" of ExxonMobil's total profit in 2023.

ExxonMobil said the decision to close the plant will not impact operations at its adjacent 236,000 b/d Port Jerome refinery. "In current market conditions, the refinery will continue to operate and supply France with fuels, lubricants, basestocks and asphalt," the firm said.

ExxonMobil has reduced its exposure to Europe's downstream sector in recent years, selling the 198,000 b/d refinery at Augusta in Italy to Algerian state-owned Sonatrach in 2018 and divesting its stake in the 126,500 b/d Trecate refinery in northern Italy to local refiner API last year.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

14/06/24

Venezuela to require appointments at some gas stations

Venezuela to require appointments at some gas stations

Caracas, 14 June (Argus) — Venezuelan drivers will need to schedule appointments in order to purchase gasoline from retail outlets selling government subsidized fuel, oil minister Pedro Tellechea told Argus on Friday. The subsidized gasoline is still inexpensive, at 2¢/liter, and plentiful, Tellechea said, despite drivers often waiting in line for hours for the fuel. But under a plan to modernize the stations selling the subsidized gas with new pumps and flat screen monitors, an appointment system will soon be required for purchases. Venezuela raised gasoline prices to 50¢/liter in 2020, to what the government has called a "international price," but then set aside stations meant just for members of the ruling party and other groups, where they could buy gasoline for much less. Today about 60pc of the country's 1,800 retail gas stations sell at unsubsidized prices. Half of Venezuela's gas stations will be refurbished this year, with pumps that can fill up an SUV in 20 seconds, supply 700 vehicles a day, and accept all forms of payment, Tellechea told reporters at a model station in Altamira, east Caracas, on Friday. "There aren't in South America gas stations right now just like the ones you are seeing today," he said. "Drivers won't have to wait in line at subsidized stations, they will have their appointments programmed to the second." Tellechea said Venezuelans are now using 95,000 b/d of gasoline but he declined to say how much is being produced domestically. Tallecha said oil production was growing, reaching "above 950,000 b/d" on Friday, but that included about 40,000 b/d of condensates and natural gas liquids. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Phillips 66 to balance fossil and renewable fuels


14/06/24
14/06/24

Q&A: Phillips 66 to balance fossil and renewable fuels

Houston, 14 June (Argus) — With Phillips 66's Rodeo, California, refinery expected to ramp up to over 50,000 b/d of renewable fuels production by the end of this quarter, all eyes are on the refiner for what is next. Zhanna Golodryga , executive vice president of emerging energy and sustainability for Phillips 66, talked to Argus at the refiner's Houston headquarters about how the company looks at investments, its focus on sustainable aviation fuel (SAF) production and why Texas might be the Silicon Valley of the energy transition. The conversation has been edited for clarity and length. When Rodeo reaches full capacity, it will represent about 3pc of your overall output. What will your fleet look like longer-term and what will be the renewables/petroleum split? Not all the refineries in our portfolio are created equal, and when we look at them what I call them is "lower-carbon energy hubs". Not low, lower, because it's going to be a combination of everything. We're looking at the assets we have in the portfolio and what we can do to help bring in lower carbon solutions and what can we build out. Our focus is going to continue to be SAF. We understand the limitations of feedstocks and we have a very strong commercial organization that is now working on providing feedstocks just for Rodeo. But we're also thinking about what we can do to bring in different feedstocks. Energy transition opportunities aren't going to replace our traditional fossil fuel refining. It's an "and", not an "or". You've highlighted a future focus on SAF. Does that mean a move away from renewable diesel (RD)? I think we have flexibility to do both and it will be market driven going forward. We have to look at demand but there is demand for SAF globally, not just in the US. Demand for gasoline is not as strong as demand for diesel and sustainable aviation fuel. That is what our focus is and then we want to diversify the feedstock. What is your outlook for RD? I think RD is here for quite some time. It's hard to predict what's going to happen by 2050 but I think we will have the demand. It's going to take a long time to electrify all future transportation. I think we have a much better opportunity for now to focus on what we're really good at. That's fuels, renewable fuels. You have faced activist investor pressure calling for Phillips 66 to focus on its core refining business. How do investors feel about the Rodeo conversion and your future plans? We have taken a pragmatic approach to the energy transition. We have criteria that we follow prior to taking any projects over the line, specifically the energy transition type projects. They must meet five key prerequisites: the right returns, the right technology that has been proven at scale, the right regulatory environment, preferably involve a partnership and be done at the right time. We have to prove with Rodeo that this is, as I call it, our license to continue to grow the business. This is our license to operate additional energy transition business. This one is going to be done extremely well. What are the policy tailwinds and headwinds to your renewables investments? When we look at our opportunities in our energy transition portfolio, we are building our economic model for them to produce the right returns without any incentives. That is our starting point. On the other hand, the IRA [US Inflation Reduction Act] has been a bipartisan initiative and we think it's going to stand for the greater good of the planet. We have to think globally, as we have the Humber refinery in the UK. It's interesting for us to see what's possible in the US with the IRA incentives, versus more of a stick in Europe. But the challenge for us is permitting and timing. We probably could have brought Rodeo online sooner if we didn't have to wait for some permits. Our headquarters are in Texas and Texas is the "energy transition Silicon Valley". I'm repeating someone's words and those are the words of Bill Gates. But I believe that. We're perfectly positioned on the Gulf coast to go to the next phase and build something here. You've mentioned Phillips 66's 265,000 b/d Sweeny refinery in Old Ocean, Texas, as a low carbon energy hub. Does that mean it is a candidate for renewable fuel conversion or co-processing? It could be an option, maybe not at Sweeny, but in the Gulf coast, maybe Lake Charles. It's driven by our hardware, just like what we've done at Rodeo. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

S Africa's ANC, DA agree to form government


14/06/24
14/06/24

S Africa's ANC, DA agree to form government

Cape Town, 14 June (Argus) — South Africa's African National Congress (ANC) and Democratic Alliance (DA) political parties today agreed to form a government while the first sitting of the new parliament was underway. The agreement, which includes the Inkatha Freedom Party (IFP), paves the way for ANC leader Cyril Ramaphosa to be re-elected president. The parties will assume various positions in government broadly in proportion to their share of seats. The government of national unity (GNU) agreement is the result of two weeks of intense negotiations after the ANC lost its long-held majority in the national election on 29 May. It secured 40.2pc of the vote, and the centre-right, pro-market DA retained its position as the official opposition with 21.8pc. The deal scuppers the possibility of an alliance between the ANC and the two largest left-wing parties, MK (uMkhonto weSizwe) and the Economic Freedom Fighters (EFF), which credit ratings agency Fitch warned could pose risks to macroeconomic stability . MK party unseated the EFF in the election to come third, winning 14.6pc of the vote. The EFF secured 9.5pc, and the IFP came a distant fifth with 3.85pc. The MK and EFF are populist parties that campaigned on agendas including wide-scale land expropriation without compensation, nationalisation of economic assets — including mines, the central bank and large banks and insurers — halting fiscal consolidation and aggressively increasing social grants. The GNU parties agreed the new administration should focus on rapid economic growth, job creation, infrastructure development and fiscal sustainability. Other priorities include building a professional, merit-based and non-partisan public service, as well as strengthening law enforcement agencies to address crime and corruption. Through a national dialogue that will include civil society, labour and business, parties will seek to develop a national social compact to enable South Africa to meet its developmental goals, they said. The GNU will take decisions in accordance with the established practice of consensus, but where no consensus is possible a principle of sufficient consensus will apply. By Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India implements e-PVC anti-dumping duties


14/06/24
14/06/24

India implements e-PVC anti-dumping duties

Singapore, 14 June (Argus) — India's central government has imposed additional anti-dumping duties (ADDs) on imports of paste polyvinyl chloride (e-PVC) from China, South Korea, Malaysia, Norway, Taiwan, and Thailand from 13 June. The implementation comes after Indian authorities concluded investigations on 26 April which found that imports were purchased at dumped prices from these countries. Authorities also noted there was a substantial increase in imports from these countries and concluded that the domestic industry was affected negatively because of this. But the authorities also incorporated exclusions to the ADDs. These were on PVC resins with a K-value below 60K, PVC blending resins, co-polymers of PVC paste resin, battery separator resins and the brand name "Biovyn" produced by European PVC producer Innovyn. The announcement of the ADDs comes at a time when regional freight challenges have been a significant concern for Indian importers. Limited container availability has resulted in South Korean producers Hanwha Solutions and LG Chem postponing shipments of cargoes that were purchased by Indian buyers for arrival in June and early July. The producers sent letters to their customers informing them of the freight challenges. Both producers indicated a raise in prices for shipments, with LG Chem indicating a rise in PVC prices by $100/t. Key Taiwanese PVC producer Formosa was forced to postpone the announcement of its offers for July shipment from this week to next week because of shipping uncertainties, according to market participants. With the lack of imports, Indian producers this week raised domestic prices of suspension-PVC (s-PVC) by 4,000 rupees/t ($48/t) and e-PVC by Rs5,000/t. Offers of Chinese-origin cargoes have been limited, with some s-PVC offers at $930-950/t this week. Chinese producers are trying to circumvent freight difficulties by shipping PVC cargoes in jumbo bags in bulk vessels instead of containers. But acceptance by Indian buyers has been underwhelming, according to market participants. The ADDs will be enforced for a period of six months from 13 June and are payable in Indian rupees. By Matthew Rajendra India e-PVC ADD list $/t Country of Origin Country of export Producer Duty China Any Formosa Industries (Ningbo) Co., Ltd. 546 China Any Shenyang Chemical Co. Ltd 115 China Any Other Chinese producers except above 600 Any China Any 600 South Korea Any Hanwha Solutions Corporation 0 South Korea Any Other South Korean producers 41 Any South Koreaa Any 41 Malaysia Any Kaneka Paste Sdn. Bhd. 317 Malaysia Any Other Malaysian producers 375 Any Malaysia Any 375 Taiwan Any Formosa Plastics Corporation 118 Taiwan Any Other Taiwanese producers 168 Any Taiwan Any 168 Thailand Any TPC Paste Resin Co. Ltd. 195 Thailand Any Other Thai producers 252 Any Thailand Any 252 Norway Any Any 328 Any Norway Any 328 Data from India's Ministry of Finance Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK political parties repeat existing stances on energy


13/06/24
13/06/24

UK political parties repeat existing stances on energy

London, 13 June (Argus) — The two main UK political parties have set out their plans, including on energy and climate change, with just three weeks until the general election. Energy security and the cost to consumers is a recurring theme for both, but the manifestos present some marked differences in approach to the energy transition. Both the incumbent Conservative and opposition Labour parties doubled down on existing positions in their respective manifestos. The Conservative party said that it remains committed to the UK's 2050 net zero emissions target, but promises a "pragmatic and proportionate" route. The party's manifesto guarantees "no new green levies or charges while accelerating the rollout of renewables". The UK's net zero goal is legally-binding, and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have been in power since 2010, and fielded five prime ministers in that time. Recent polling data show a substantial lead for Labour, which performed well at local elections in May. Labour placed strong focus on the opportunity the transition offers, saying that it would place the UK at the "forefront of climate action by creating the green jobs of the future at home and driving forward the energy transition on the global stage". The party has committed to zero-carbon power by 2030, although it would "maintain a strategic reserve of gas power stations to guarantee security of supply", it said. The Conservative manifesto reiterates the party's plans to build new gas-fired power plants. The party had previously committed to a decarbonised power grid by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto. The two main parties clearly diverge on their approaches to North Sea oil and gas production. The Conservatives aim to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers in place "until 2028-29, unless prices fall back to normal sooner". Labour confirmed plans to lift the rate to 78pc and run the tax until the end of the next parliament, which is likely to be mid-2029. Labour is also clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences — for oil, gas or coal. The Conservatives restated the party's aim to legislate for annual North Sea licensing rounds . Both parties back nuclear energy, including small modular reactors — though those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, from a baseline of end-2023. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. Finance in focus Both parties are keen to pull in private-sector investment, while Labour took up an original Conservative pledge to "make the UK the green finance capital of the world". And both pledge to address the cost of energy for consumers — Labour through local power generation projects and home insulation upgrades, and the Conservatives by ruling out any further "green levies". The latter plans to reverse London's expansion of the ultra-low emissions zone — originally planned by Conservative then-mayor and later prime minister Boris Johnson. Labour said that it would restore a phase-out date of 2030 for new internal combustion engine cars — which prime minister Rishi Sunak in September pushed back to 2035 . On an international level, both parties mention climate leadership at summits such as UN Cops. The Conservatives pledged to "ring-fence" the UK's climate finance commitments, while Labour committed to restore development spending to 0.7pc of gross national income "as soon as fiscal circumstances allow". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more