Total comes to ensure an outlet Italy refining activities. The French oil tanker yesterday announced the creation of a joint venture with ERG in Italy in the refining and distribution of fuel. Named "totalerg" and valued at around EUR 1.5 billion, this new entity will be 49 owned by Total and 51 by the Italian independent refiner. The French oil tanker will provide a balance of EUR 65 million to ERG to reach that threshold.
In becoming minority in Italy, the French oil tanker accelerates the restructuring of its European activities of refining and distribution, a difficult sector. Next step: the closure of the refinery at Dunkirk, which must be announced Monday.
With a joint governance, TotalErg will become the number three of the Italian distribution with more than smics gas stations on the peninsula. The two players assess the market share of TotalErg to about 13, far behind Agip, the subsidiary of the oil tanker ENI (more than 30) and American Esso (about 17). In Italy, the margins are 5-10 higher than in the French market. "The Italian market is characterized by a low penetration of large surfaces and sites to the very many times and small size," explains Stanley Nahon, Booz & Company Cabinet.
A market fell by 1 to 2 per year, Total and ERG seek to reach a critical size to reduce their costs. "With this operation, we should realize savings in the order of EUR 50 million per year," said Benoît Luc, Director of strategy in the domestic refining-marketing of the group. At the end of this reconciliation, the two groups should pool their purchases, their marketing plans, but also "optimize workforce", without however layoffs.
The joint venture of Total and ERG will also gather all Italian assets of the two actors in refining except those located in Sicily. Total will reduce its stake in the refinery of Rome from 72 to 49 in favour of ERG. At the same time, the French oil tanker will buy back half of its 26 stake in the refinery of Trecate, in Piedmont, operated by the American ExxonMobil to ERG.
Optimize logistics
In the end, Total and ERG will share a production capacity of approximately 1 million tonnes per year. "The two operations will be compensated," explains Benoît Luc. The production capacity of the joint venture will be about 116.000 barrels per day, or about 8 of Italian demand, according to Total. However, the approximation will enable Italian service stations of the French oil tanker to have a point of supply in the North of the peninsula. It will ensure also an outlet at the Rome of Total refinery at the same time where the sector is affected by serious overcapacity. In short, the device will optimize the logistics while building a stronger integration between refining and distribution.
For ERG, this operation also marks a shift. At the end of the transaction, the Group refining operations will be managed with two different partners. On the Mainland, it will be Total and in Sicily, the Russian Lukoil. It is indeed this 49 in the huge refinery of Priolo (320,000 barrels per day), operated by ERG in Sicily.
Total and ERG negotiated this grouping of assets for about a year. The catastrophic situation in refining probably accelerated things. ERG saw its turnover fall by more than 50 on the first nine months of the year 2009, 4.5 billion euros. At the same time, margins collapsed more than 60. What push to act quickly to get the head of the water.
1 million euros in 2009 600000 for LuminexMessier found Arthur Abbey before the juryWe provide services to many Internet companiesIt will be awarded in September 2010 the three winners3 in one year the niche of fanning the covetousBecause the market is now organizing itselfThis is the situation in which Renault todayBut I have nothing to add on this point today7 without a sufficient demand they explainFirst because only two lots 5 megahertz and 4
