Total’s Five French Oil Refineries Resuming Work as Strikes End

Dec 27, 2013 11:31 am ET

Dec. 27 (Bloomberg) -- All five of Total SA’s refineries in France are resuming operations after employees at Gonfreville voted to return to work, the last to come back after a strike that began two weeks ago, the CGT union said.

All facilities are resuming activity, Eric Sellini, a CGT union representative, said by phone today. The 247,000 barrel-a- day refinery at Gonfreville in northern France, Total’s largest in the country, is the third site since yesterday where staff have ended industrial action. Officials at Paris-based Total haven’t returned two phone calls and an e-mail seeking comment on the plant’s status. European diesel traded near the highest in two months this week, boosted by the strikes, which began on Dec. 13.

“We estimate that France will have lost about 5.1 million barrels of distillates and 2.5 million barrels of gasoline production during those strikes,” Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland, said today in an e-mailed report. “With the French refineries gradually coming back we expect to see the European diesel differentials give back some of their recent gains.”

The premium for benchmark diesel barges in the Amsterdam, Rotterdam, Antwerp oil hub was much as $15 a ton more than benchmark ICE gasoil futures on Dec. 24, up from $12.50 on Dec. 13, according to a survey of traders and brokers monitoring the Platts pricing window. Diesel is France’s main transport fuel.

Staff Votes

Staff at the La Mede refinery voted overnight to resume work, and the Feyzin site ended industrial action yesterday, according to CGT.

Total’s refineries in France also include the Donges plant, where a strike ended last weekend, and the Grandpuits facility where workers went back to work on Dec. 17. The sites can collectively process about 800,000 barrels of crude a day, or 60 percent of the nation’s output, according to data compiled by Bloomberg. Demand for oil products in France averaged 1.76 million barrels a day in the third quarter, figures from the International Energy Agency published on Dec. 11 show.

At least two unions representing Total’s refining workers, CFDT and CGC-CFE, agreed to a pay deal with the company last week. CGT, which called for the industrial action, didn’t sign the accord, pressing for further benefits.

Total’s crude-processing and petrochemicals business in France may lose as much as 500 million euros ($690 million) this year, a company official said last week, asking not to be identified, citing corporate policy.

--Editors: Grant Smith, Raj Rajendran