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Crude closure? Tamoil refinery to stop work in Switzerland

Some 240 people work at the refinery near Monthey in canton Valais

(Keystone)

Tamoil's Swiss branch has announced plans to suspend operations at its refinery in the south west of the country as a result of heavy financial losses.

The firm announced on Tuesday that it was ‘interrupting’ work at its 55,000-barrel-per day refinery at Collombey owing to “severe market pressures” caused by higher imports of refined, petroleum products, rapidly declining fuel demand and increasing regulatory costs. 

“Since 2000 we invested more than CHF700 million ($685 million) to raise the refinery’s competitiveness and improve its economic and environmental performance. In spite of our efforts, we consider the continuation of refining operations at Collombey to be unsustainable at this time,” declared Tamoil Managing Director Nuri Rifaat. 

Tamoil, which bought the plant in 1990, employs 238 people at the 50-year-old refinery in canton Valais. 

Rifaat said the move was not definitive, however: “It is impossible to predict the duration of interruption. We will closely monitor developments in the business environment and market in order to decide the definitive future of the refinery.” 

The Collombey plant is one of only two oil refineries in Switzerland; the other is located at Cressier, canton Neuchâtel. 

Swiss supplies

Martin Stucky, spokesman for the Swiss Petrol Union, told Le Temps newspaper that Switzerland’s oil supply would not be threatened if Collombey closes. 

Around 17% of all petroleum products consumed in Switzerland arrive via pipelines passing from Genoa along the Rhône Valley and ending up in Collombey, but these would easily be compensated for, said Stucky. 

“Switzerland would lose a degree of independence, but security over supplies is not at all in danger,” he declared. 

The Valais government, meanwhile, criticised Tamoil’s decision. The head of the Valais cantonal government Jean-Michel Cina said he had asked the firm to study all possible options including a five-year deadline to decide the plant’s future. 

The firm has announced its willingness to maintain the current infrastructure in view of an eventual takeover by another operator. The Valais authorities have set up a taskforce to help support the firm to find a buyer. 

In the past Tamoil has been at the centre of a controversy to clean-up the plant and was threatened with an operations ban over environmental pollution. 

Despite Tuesday’s announcement, Tamoil says it plans to continue its presence in Switzerland in the retail and wholesale sectors, where it currently has a network of 300 service stations, selling 2.3 million tonnes of petroleum products. 

On Tuesday the price of oil dipped below $45 a barrel following the latest sign from OPEC that the group doesn't plan to cut production. Global oversupply has pushed crude prices to the lowest since 2009.

swissinfo.ch with agencies

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