French Oil Refinery Strikes Spread as Fuel Shortages Worsen

.Total CEO threatens to revise investment in French plants

.All eight of nation’s refineries are disrupted by strikes: CGT

A French labor dispute that already caused fuel shortages and clashes between police and protesters worsened Tuesday as every one of the nation’s oil refineries experienced disruptions or outright shutdowns.

Oil companies mobilized hundreds of trucks to ship diesel and gasoline around the country as filling stations ran dry after refineries were halted by striking workers. Police in riot gear pushed back workers blocking access to a facility in southern France, while the nation’s largest oil company urged people not to succumb to panic buying of fuel.

Workers are protesting against President Francois Hollande’s plans to change labor laws to reduce overtime pay and make it easier to fire staff in some cases. While the government has watered down its proposals since first floating them in February, unions are calling for them to be scrapped altogether. The new law will not be withdrawn and the strikers will be met with a robust response from police, Prime Minister Manuel Valls said on Europe 1 radio Tuesday.

“It’s beginning to go too far,” Patrick Pouyanne, chief executive officer of Total, said at the company’s annual general meeting in Paris. “It’s serious for our company, which is facing difficulties in a backdrop of low oil prices, and which needs all its sites.”

Refineries Halted

Total SA’s Feyzin refinery near Lyon and its Normandy plant have stopped production, La Mede was working at a lower rate, and later this week the Grandpuits facility near Paris will come to a complete halt and Donges, close to Nantes, will shut down several units, according to a company spokesman. While Exxon Mobil Corp.’s Fos-sur-Mer refinery in southern France was still operating, fuel deliveries from the plant were suspended, said Catherine Brun, a company spokeswoman.

The situation was less clear at Exxon Mobil’s Gravenchon plant in northern France. No units at the plant had been halted and fuel deliveries were continuing as normal, said Brun. Processing capacity at the plant had been reduced as some staff stopped work, said Emmanuel Lepine, a CGT union representative.

The Petroineos refinery at Lavera was in the process of being halted, Lepine said.

Fuel Trucks

Out of Total’s 2,200 gas stations across the country, 188 were shut down and 513 faced partial shortages, the company said Tuesday morning. About 800 oil trucks were being mobilized to deliver fuel, compared with 350 on a normal day.

“I’m asking our clients to be responsible and not to rush and create artificial shortages,” Pouyanne said. “It’s better to let us refill our stations. We can do it. We have access to many depots.”

Total, which operates five refineries in France, “will seriously revise” its investment plans at facilities that are “taken hostage” for a cause that’s unrelated to the company, Pouyanne added. It may reconsider a plan to spend 500 million euros ($557 million) to upgrade the Donges facility if “this plant doesn’t respect the consensus that we built with the staff,” he said.

“The government must withdraw its law,” said the CGT union’s Lepine. Pouyanne’s comments about investment were “the usual threat,” he said.

Source: bloomberg.com