* Tamoil Swiss says will invest millions of francs
* Follows canton's ultimatum on plant clean-up
* Canton's reaction was "disproportionate" -Tamoil
By Emma Farge
GENEVA, May 24 Libyan-owned Tamoil's Swiss
branch said it will spend "tens of millions" of Swiss francs on
its Collombey refinery after cantonal authorities issued an
ultimatum on a clean-up of the plant and threatened to force it
to suspend operations.
The Swiss canton of Valais, best known for the "Toblerone
mountain" and world-class ski resorts, in March published a list
of 15 steps it said Tamoil should implement to clean up the
50-year old plant.
If the measures are not completed during the next planned
maintenance outages in September and in May-June next year,
Tamoil's refinery will face an operational ban, it said.
"Investments adding up to tens of millions of francs are
planned for the next few years," Tamoil Swiss said in a
statement on its website.
Refinery experts told Reuters that the canton's list of
demands would likely cost between $5-10 million.
Tamoil, which bought the plant in 1990 and is now one of the
country's largest fuel retailers, blames delays in its
investments to the Libyan revolution last year.
"We regret the decision of Valais authorities which
envisages forcing a halt of refining in the case of a delay in
implementing our plans and the lack of consideration for the
difficulties we faced in 2011," it said.
"...this decision is disproportionate and misses the point."
Tamoil said it has already spent nearly 40 million Swiss
Francs ($42 million) in the last five years on the plant.
New investments include a 20 million Swiss Franc ($20.95
million) watertight basin beneath the refinery which Tamoil said
will be completed by 2018.
It confirmed plans to shut the 78,000 barrel per day unit in
September and May-June 2013.
Tamoil's Swiss unit did not respond to requests for further
Industry sources told Reuters that the refinery, one of just
two in the landlocked country, was put up for sale last year
during the uprising in Libya.
Oil majors like BP and Shell stopped
business with the firm last year because of international
Even before the revolution, Tamoil faced operating
challenges in Switzerland due to a forced switch in its crude
slate after 2008, industry sources said.
OPEC member Libya imposed an oil embargo on Switzerland
after Swiss authorities arrested the son of leader Muammar
Gaddafi in Geneva after servants claimed he had abused them.
New environmental rules, including the extension of the EU
Emissions Trading Scheme to refining, and falling demand for oil
products are making it tough for refiners to stay competitive.
Tamoil's Italian refinery, the 90,000 bpd Cremona unit, was
shut in 2011 and converted into a depot.
The head of Switzerland's oil association Niklaus Boss said
that Switzerland could meet its supply needs without the
Collombey refinery through imports, although fuel costs could
"It would not be an impact on security of supply as we would
import from Rotterdam and Marseilles via the pipeline. Maybe
some transport costs would be higher for some retailers," he
Vitol, the world's largest oil trader, agreed to buy
Switzerland's Cressier refinery earlier this month via a joint
venture with the co-founder of Petroplus.