Update adds new information in bold.
European refiner Petroplus today said it would file for insolvency and shut down its remaining operations.
The Switzerland-based company said its negotiations with lenders under its revolving credit facility had failed and that they have served notices of acceleration and commenced enforcement actions and appointed a receiver to deal with its assets in the UK. Its principal asset in the UK is the 180,000 b/d Coryton refinery which is vital to BP's products supplies to southern England. The refinery supplies around 20pc of total motor fuel supplies in the south of England. This morning, the gates at Coryton were closed with no products leaving.
Last week, BP was looking at options for intervening to ensure that Coryton kept operating and was in talks with the refiner. Today's announcement came as a surprise to customers. BP is looking for clarification of the situation, including whether access to jetties and terminal facilities at Coryton is still possible. It has no immediate supply problems and will look at bringing supplies into the south of England from refineries at Fawley and Lindsey, as well as imports.
Having closed its three other refineries since a group of banks sparked the credit crisis at the end of December by withdrawing assurances that the revolving facility would remain secure until the end of the first quarter of this year, Petroplus has only been operating flagship Coryton and the profitable 100,000 b/d Ingolstadt plant in Germany. The new move by the banks yesterday pushed Petroplus into a default under the terms of $1.75bn bond agreements. It is only two weeks since the company said it had reached a temporary deal that would allow it to keep Coryton and Ingolstadt open and negotiate an amendment to the credit facility, expected to be completed in the second half of this month.
Today's announcement will come as a shock to Petroplus traders who only yesterday were saying that company was continuing to buy feedstock for Coryton and Ingolstadt. One said last night that he knew that company shares had been suspended from trading in Switzerland and that this heralded a major announcement but expected positive news.
Petroplus said it had been looking for alternative financing and liquidity facilities in parallel with holding talks with the banks. Last week, it said would try to sell its 146,000 b/d Petit Couronne refinery in France and would evaluate strategic alternatives, including potential sales, for its 115,000 b/d BRC Antwerp plant in Belgium and 68,000 b/d Cressier refinery in Switzerland. Azerbaijan's state-owned Socar is interested the Cressier plant. But Total said it was not interested in buying Petit Couronne as it is trying to reduce rather than increase its exposure to refining in Europe. The French government will today be looking for ways to ensure a future for Petit Couronne, anxious not to revive the discontent in the French refining sector that led to a one month strike in late 2010.
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