Monday, May 27, 2024

ExxonMobil to shut down French steam cracker and cut 677 jobs

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ExxonMobil’s facility in Gravenchon processes 425,000 t/y of ethylene

ENERGY costs continue to pummel the European oil and gas market, with ExxonMobil announcing plans to close one of its primary chemical production facilities in France, impacting 677 jobs.

ExxonMobil’s French subsidiary is shutting down its ethylene cracker and related derivatives and logistics facilities at its Gravenchon site in Port-Jérôme-sur-Seine, Normandy.

ExxonMobil said the Gravenchon facility was not competitive, incurring more than €500m (US$532m) in losses since 2018.

It said in a statement: “The configuration of the steam cracker, its small size compared to newer units, high operating costs in Europe and higher energy prices make it uncompetitive.”

The company also revealed its plan to sell its Fos-sur-Mer refinery and depots in the south of France to Rhône Energies, which will see the transfer of 310 workers.

Poor fuel demand in Europe

The Gravenchon cracker has the capacity to produce 425,000 t/y of ethylene and 290,000 t/y of propylene.

Ethylene producers are facing a rough market in Europe this year as prices continue to fluctuate due to global oversupply of ethylene and competition from China and the Middle East.

ExxonMobil is not the only company struggling with demand growth, as Shell and BP have also downscaled refinery operations in Germany. BP plans to close its oil refinery in Gelsenkirchen over similar issues of competitiveness and high structural costs, according to Bloomberg.

Potential worker strike

The French General Confederation of Labour (CGT) trade union has called for ExxonMobil workers to down tools in response to the shutdown, reports Argus.

CGT have said the decision will lead to job losses for an additional 3,000 indirect positions and sub-contractors. The union said it will announce its plan of action soon.

ExxonMobil is working with works councils and aims to support employees in funding new jobs, with no separations being considered until 2025.

The shutdown is subject to government approval, with the closure expected before year-end. and fully remediate the site.

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