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France's two biggest refineries halt operations as pension protests escalate


Gonfreville, Gravenchon refineries shutting down

High regional oil stocks blunt price impact

Strikes extended at key oil ports

  • Author
  • Elza Turner    Virginie Malicier    George Papageorgiou    Robert Perkins
  • Editor
  • Bill Montgomery
  • Commodity
  • LNG Natural Gas Oil

France's two biggest refineries are halting operations as protests over the government's pension reform plans continue to escalate, union officials said March 17.

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The 247,000 b/d Gonfreville refinery in Normandy is set to halt operations, with the first unit closures starting "in a few hours," a CGT union official told to S&P Global Commodity Insights early March 17.

Operator TotalEnergies did not reply to requests for comment.

ExxonMobil's Gravenchon refinery in northwestern France has also halted one of its two CDUs due to a lack of crude as port staff at the nearby oil terminal at Le Havre are also on strike, the official said. The second CDU is likely to halt early next week if crude deliveries remain suspended, even though staff at the refinery resumed product dispatches March 8. ExxonMobil was not available to comment.

Staff at Petroineos' Lavera refinery have also decided to start halting units from March 20, another union source said. The CGT union has also called on the staff to stop product dispatches as of March 17. The company declined to comment.

The French government's plans to raise the retirement age from 62 to 64 has sparked more than a month of heated political debate and protest strikes. Unions have vowed to maintain their opposition to the pension changes, with the CGT calling for another nationwide day of protests March 23, extending the action that started Jan. 19.

The action has also hampered operations at France's four LNG import terminals, briefly spiking Europe's benchmark TTF gas prices.

Stock buffer

Combined, the 247,000 b/d Gonfreville refinery and 240,000 b/d Gravenchon plant make up 42% of France's 1.164 million b/d of refining capacity across six refineries.

But the strikes at French refineries have but yet to impact product flows despite loadings disruptions. High regional stock levels have also muted any impact on product cracks in the region.

"High gasoline and diesel stocks in ARA have helped cushion the impact, reducing the likelihood of large price spikes seen in October during a period of strikes in France," oil analysts at S&P Global said in a March 16 note.

Oil product stocks in OECD Europe built by 23.8 million barrels in January, largely in line with the seasonal trend, helped by a surge in Russian flows ahead of an EU embargo on Russian product exports from Feb, 5. Right before the product import ban from Russia, middle distillate inventories increased by 20.9 million alone to hit a 16-month high.

Product stock in the Amsterdam-Rotterdam-Antwerp refining hub stood at 46 million barrels at the end of February, up from 37 million barrels in November, according to S&P Global data.

Port strikes

Meanwhile, product dispatches remain blocked from TotalEnergies' Donges refinery, which has been offline due to technical reasons since late February, and La Mede biorefinery, as well as from ExxonMobil's Fos refinery in the Mediterranean.

The blockades, which started March 7, appeared to be running out of steam earlier this week as product dispatches were gradually resuming.

Some product dispatches had resumed previously at TotalEnergies' Feyzin and Petroineos' Lavera, although staff remain on strike, according to union sources.

Operations at some ports were also blocked this week as the CGT union called on staff to halt work for 72 hours March 14-16. Staff at some oil terminals, including Fos and Lavera in the Mediterranean, have extended strike actions until March 20, according to shipping sources. The CIM oil terminal at Le Havre has extended the action until March 19, sources said.

Meanwhile, the French federation of port and dock workers, part of the CGT labor union, had called on port workers to continue protests by halting work for another 72 hours over March 21-23.