Total sees refining profits tumble

15/07/2009

Total has seen its profits from refining operations in Europe fall 69 per cent in the second quarter of this year when compared to the same period in 2008, with revenues weighed down by anaemic demand for DERV and petrol.

In a statement, the company said that profits from processing one barrel of crude into petroleum products fell to $12.40 (£7.57) per metric tonne, down from $40.20 last year.

The group attributed the falling profits to a slump in demand for DERV and petrol in consumer, commercial and industrial markets.

Jason Kenney, an Edinburgh-based analyst at ING Wholesale Banking, told Bloomberg: "This is perhaps a low point for refining and for refiners. There is not much upside on the horizon either."

With the slump in demand for refined products such as petrol and DERV, in addition to heating oil and other distillates, Total has been forced to consider plant closures and reduced working hours.

Last month, the group became embroiled in a dispute with workers at the Lindsey oil refinery in Lincolnshire who enacted wildcat strikes after the French firm announced redundancies at the site.