French union eyes strike over Exxon's petchem closure

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

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.

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