Coryton refinery attracts interest -Howitt

LONDON Tue Jan 31, 2012 5:18pm GMT

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LONDON (Reuters) - The UK's Coryton refinery, owned by troubled Swiss refiner Petroplus PPHN.S, has attracted dozens of enquiries from interested parties, Richard Howitt, regional member of the European parliament (MEP), said on Tuesday.

Petroplus, Europe's largest independent refinery by capacity, is filing for insolvency after battling with high debt and poor refining margins.

The Coryton refinery, which can process 175,000 barrels of crude oil per day, has been in UK administration with consultancy PwC since January 24.

The plant is the most sophisticated of the company's refineries and is more profitable than others.

"Serious talks have begun with a number of people," Howitt said, adding that the most likely bidder to buy it would be a Russian or Asian energy giant.

He said he would encourage British major BP (BP.L) to be a part of the solution, because 90 percent of Coryton's refined products go to BP, which sold Coryton to Petroplus in 2007 for about $1.4 billion (888.0 million pounds).

"It is possible BP could be a part of the solution without purchasing the refinery," Howitt told Reuters in an interview. "Personally I think that the most likely outcome is BP aren't a part of the rescue package."

Howitt said he understood BP Europe had had discussions with Petroplus about Coryton.

But BP has thus far declined to comment on its involvement.

PwC on Tuesday said Coryton had received a cargo of crude oil to process, which could keep the plant running for "a number of days.

CAN'T AFFORD TO LOSE

The insolvency of Petroplus puts at risk more than 2,000 jobs across Europe as data on Tuesday showed that unemployment in the euro zone has risen to its highest level since before the euro was introduced.

The closure of Petit Couronne, which employs some 550 people and has a total throughput capacity of 161,800 bpd, prompted the French government to offer support as the Elysee braces for an election rife with job-protection rhetoric.

Howitt will meet with European Commissioner Gunther Oettinger in Brussels at the European Parliament later today with MEPs from France, Belgium and Germany to discuss the Petroplus collapse and its impact on the Coryton, Petit-Couronne, Antwerp and Ingolstadt refineries.

The MEPs will ask the European Commission to show its willingness to back financial guarantees of "contingent risk" if they are offered by the British or other governments under EU "state-aid" rules.

A fifth Petroplus refinery in Switzerland, Cressier, got a two-month grace period to keep creditors at bay as it seeks to reorganise, a regional court ruled on Tuesday.

Howitt said if national governments were willing to commit to financial guarantees to cover contingent risk, it would go some way towards securing a long-term future for the refineries.

"This is not a handout but a guiding hand, and one that could make all the difference between Coryton securing a new buyer or risking long-term closure," he said.

"Any new buyer will still have to take on normal commercial risk, but in an operation with high complexity and costs, a state-backed 'insurance policy' against unexpected losses at the time of purchase could oil the wheels of a deal at a time it is desperately needed," Howitt said.

He told Reuters that at the meeting with Oettinger the group hoped to discuss the threat to thousands of jobs and the strategic importance of refined products supply to Europe.

"Petroplus ... has a strategic importance for Britain and Europe; it is the largest independent refiner. I have to say I read comments from analysts, which said that if Petroplus's refineries close, it would solve the problems of Europe's surplus capacity. I read those comments in shocking despair," Howitt said.

"There will be very strong demand at the European Commission tonight to recognise the strategic importance of Petroplus's refineries. Not simply to allow refineries to close and jobs to be lost."

On the future of Petroplus as a company, however, Howitt does not expect it to survive as a single entity.

"It is likely to be broken up. On behalf of Coryton, Britain's bankruptcy and insolvency law is extremely strict. The British receiver is only looking to take forward the future for the Coryton side," he said.

(Reporting by Ikuko Kurahone, Claire Milhench and Zaida Espana, editing by Jane Baird)

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