Total Says Strikes Could Jeopardize its Investments in France

French oil and gas company Total stated that it might reconsider further investments in its French plants, as a result of strikes that have forced the shutdown of two of its refineries, with two more in the process of shutting down. Noting that the temporary shutdowns are the result of industrial action over France’s planned labor reforms, which have generated street protests that lasted for weeks.

Patrick Pouyanne, Total’s Chief Executive, told journalists on the sidelines of the company’s shareholder meeting in Paris that the strikes were a breach of a pact reach with workers four years ago. Pouyanne promised to make the business profitable by the end of 2016 through heavy investment, back when he took over as head of the oil major’s refining and chemicals unit in 2012.

“This (strike) will lead us to seriously reconsider the investment plans we had for the various sites,” Pouyanne said.

Total invested about 1 billion euros ($1.11 billion) in its Normandy refining and petrochemical complex between 2012 and 2014, with a further 200 million euros spent on its Carling petrochemical unit, and said last year that it will further invest 400 million euros to modernize the 220,000 barrels per day (bpd) Donges refinery to produce fuel for the European market.

Moreover it said it will invest 200 million euros in the 153,000 bpd La Mede plant to transform it into France’s first biorefinery, though both refineries are still making loss.

The company’s current head of refining and chemicals, Phillippe Sauquet, warned of the potential impact of the ongoing industrial action, through a letter he sent to the employees.

“It constitutes taking our business hostage in a fight that is not ours,” he said in the letter, which was seen by Reuters.

“If we are not able to avoid such circumstances, leading to the shutdown of our units, it goes without saying that our customers would reconsider the confidence they have placed in us, and thus we should revise our future projects.”

Total Says Strikes Could Jeopardize its Investments in France