337,500bpd of throughput capacity to be shut in as lending squeeze halts crude purchases.

Petroplus, Europe’s largest independent refiner, late last week announced that it will close three of its five oil refineries over the coming weeks, due to a credit freeze.

“The company will start temporary economic shutdowns of the Petit Couronne [161,800bpd, France], Antwerp [107,500bpd, Belgium] and Cressier [68,000bpd, Switzerland] refineries in January 2012 given limited credit availability and the economic climate in Europe. The restart of the refineries is dependent on economic conditions and credit availability,” Petroplus said in a statement dated December 30. 

The three refineries slated for temporary closure together have a throughput capacity of 337,500bpd, equivalent to 50.5% of Petroplus’s total throughput capacity of 667,300bpd. 

A spokesperson for Petroplus in France told the Reuters news agency that the Petit Couronne refinery will have to shut down due to a lack of crude starting on Monday.

“There is no more crude coming in so the plant cannot work any more so we need to start shutting down all the plant's units on Monday, but this is a technical shutdown. The shutdown will take about a week,” the spokesperson said.

Yvon Scornet, a representative of the CGT union in France, has warned that the situation could lead to the permanent closure of the Petit Couronne refinery. Eric Besson, France’s industry minister, will meet Petroplus’s CEO, Jean-Paul Vettier on Wednesday to discuss the site’s future and the company’s negotiations with lenders. Negative refining margins have driven French refiners to estimated losses of €800 million (US$1.04 billion) in 2011.

13 lenders, including BNP Paribas, Société Générale, Natixis, Credit Suisse, Morgan Stanley and Deutsche Bank, have opted to freeze the US$1 billion facility Petroplus needs to continue buying crude. The decision has come as a surprise to many, given that it took place just two months after the banks agreed to allow Petroplus to break debt covenants without penalty. Back in December, Standard & Poor’s cut the company’s corporate credit rating to CCC+ from B, while warning it could face bankruptcy if an agreement with banks wasn’t reached and stating that “we now assess Petroplus’s liquidity situation as ‘weak’.”

Royal Dutch Shell is said to be closely watching developments at Petroplus. “We are permanently watching the developments at Petroplus. Due to our size in Switzerland we rely on our customers to secure supplies,” Peter Voser, Shell’s CEO, said in an interview with Swiss newspaper Sonntag on Sunday.