PARIS/LONDON (Reuters) - Total TOTF.PA will cut capacity and jobs at its Lindsey refinery in Britain, the French oil major said on Thursday, as the group adapts to weak demand for fuel in Europe and rising competition from overseas.
European refiners have been struggling with overcapacity as the region’s petrol and diesel consumption has declined over the past decade, while new refineries in the Middle East and India are expected to heap more pressure on European plants.
“We will cut the capacity by half. Jobs will be reduced to 400 positions from 580 positions,” Total Chief Executive Patrick Pouyanne told reporters.
Having studied several options for Lindsey in recent years, including a sale, Total said it is now embarking on an “adaptation plan” to improve efficiency and competitiveness at the plant on England’s east coast. Lindsey currently has capacity of 207,000 barrels per day.
“We think we can keep this refinery as part of the Total group. Workers there showed they were willing to fight to make it profitable,” Pouyanne said after Thursday’s quarterly results announcement.
The company’s plan, which involves a 33 million pound ($51 million) investment, will cut refining capacity by 50 percent, by shutting down one of the crude distillation units and associated operations.
Total will also reorganize the refinery’s support and operational services, with a further 150 million pounds to be invested over the next five years for turnaround maintenance and other improvements, the company said.
Reporting by Michel Rose and Claire Milhench; Editing by David Goodman
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