Total goes ahead with refinery investment

The investment will double revenues at the 340,000 barrel-per-day (bpd) plant to $500m a year, Patrick Pouyanne, head of the refining and petrochemical branch, said.

“We are investing to prepare the future to make the platform more competitive and more profitable,” Mr Pouyanne said, adding that the overall capacity of the refinery would not change.

Europe’s refining industry is struggling with declining margins for its aging plants, which require heavy spending on maintenance, while demand is weak as the region’s economies slump. The pressures have led to four plant closures in 2012 and another three announced so far this year.

Total’s strategy is to focus on investing in its larger, integrated petrochemical and refining plants to make them more efficient, while keeping a lid on investments at its other European refineries.

The French company cut its European refining capacity by 500,000 barrels per day between 2007 and 2011 and has said it aims to cut the region’s refining and petrochemical production even more, while it wants to grow in Asia and the Middle East.

Meanwhile, it has said it expects the merger of its refining and petrochemical operations to increase the arm’s net operating income by $650m per year from 2015.

It has already made a similar move at its Gonfreville refinery between 2011 and 2013.