By INTI LANDAURO
Royal Dutch Shell has signed a contract to hire the French
refinery owned by insolvent Swiss-based refiner Petroplus to
process crude oil for six months, French President Nicolas
Sarkozy said on Friday.
"This contract isn't a definite answer," Sarkozy said. "But
without this contract, the refinery was over."
Industrial machinery like the refinery cannot stay idle for too
long, he said during a trip to the facility, which is located
in Petit-Couronne, a town on the French northern coast.
Resuming operations at the refinery, which was gradually
shut down in January, requires 50 million investment,
Shell will transfer 20 million to the refinery in
advance of future payments to the refinery. The government will
finance the remaining 30 million, Sarkozy said.
Petroplus, one of the largest independent European refiners,
was forced to file for insolvency in late January after
struggling for months with weak demand due to the economic
slowdown in Europe and overcapacity amid tighter credit
conditions, high crude prices and competition from Asia and the
French and German courts have appointed administrators to
handle their units of Petroplus after the Swiss-based refiner
filed for protection from creditors after running out of cash,
the company said earlier Thursday.
A French prosecutor is investigating whether there was
wrongdoing in the insolvency process.
Dow Jones Newswires