UK refinery of Petroplus back in production

AP News
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Posted: Jan 26, 2012 8:00 AM
UK refinery of Petroplus back in production

The British refinery owned by collapsed Swiss energy company Petroplus Holdings has resumed shipments to customers, while authorities in France are investigating possible misuse of funds by the company.

Delivery trucks were rolling Thursday from Coryton refinery near London _ which accounts for about 10 percent of Britain's refinery output _ for the first time since the British subsidiary was placed in administration two days earlier.

In the French city of Nanterre, an official said have opened an investigation into suspected bankruptcy through misuse of funds at a French unit of Petroplus.

The probe centers on suspicions that a bank account of Petroplus-France was stripped of about euro100 million ($129 million) in funds.

Petroplus said on Wednesday that it had begun various forms of insolvency proceedings in Switzerland, France and Germany.

The company said a court had appointed Jaffe Rechtsanwaelte Insolvenzverwalter as administrator of the German operations. In France, FHB Administrateurs Judiciaires is administering the Petroplus operations.

Petroplus said it had filed in Switzerland for composition proceedings, a form of bankruptcy in which the company claims it acted in good faith.

Petroplus, Europe's largest independent oil refiner, filed for insolvency after failing to agree with its lenders on its $1.75 billion credit line. The company reported a net loss of $413 million in the first nine months of last year.

The company had announced on Dec. 30 that it would temporarily shut down its French and Belgian refineries "given limited credit availability and the economic climate in Europe."

Trading in the Petroplus shares had been suspended on Monday.

Refinery profitability has been squeezed as operating expenses and the cost of crude oil rose faster than the value of the products, and the economic slowdown in Europe has added to the pressure.

A survey by energy consultancy Wood Mackenzie in 2010 found that 29 of 96 refineries in the European Union did not generate a positive net cash margin.