Total Spending €600 Million on Refinery Conversions

Total has revealed plans to revamp and upgrade two of its five refineries in France to meet the demands of new markets and restore profitability.

The oil and petrochemicals giant is spending €200 million to turn the La Mède facility in the south into France's first biorefinery. As one of the biggest in Europe, the upgraded plant will be able to meet the growing demand for biofuels, it says. Crude oil processing here will be phased out up to the end of 2016.

At Donges, near Nantes, Total will spend €400 million to convert its refinery to produce low-sulphur fuels in line with the latest EU specifications and to "capture profitable markets."

Conversion of the facilities will take place without layoffs or personnel transfers to other group sites, the group stressed.

CEO Patrick Pouyanné pointed to the need to realign refinery operations and products in Europe to the meet the needs of changing markets and react to a decline in profitability, which Total blames on overcapacity and heightened competition from players in Asia and the Middle East as well as US companies with access to cheap shale oil and gas.

Total said there is no need to convert the refineries at Gonfreville in Normandy, Grandpuits in the Paris region and Feyzin near Lyon, as these have state-of-the-art operations and are still profitable despite the deteriorating refinery climate.