By an OGJ correspondent
PARIS, May 9 -- Within the next 2 years Royal Dutch/Shell Group will have reduced to 350 the number of its retail stations in France from the 950 it currently operates. Shell said it plans to focus on highway service stations with high-volume sales and added-value services to clients. Last month, Shell bolstered its highway network with the acquisition of 7 such service stations from Total SA (formerly TotalFinaElf SA).
Christian Balmes, president of Shell France, told the recent annual press conference of the oil companies' trade group Union Française de l'Industrie Pétrolière (UFIP)—of which he is the current president—that both French oil majors and independents had ceased losing market share to the super and hypermarkets and that the "breakeven point" was established in 2002: a high 55.8% for the supermarkets and a low 44.2% for the UFIP and independent retailers.
Since 1980, UFIP and independents' networks have shut down 30,000 service stations while supermarkets have opened 3,000. UFIP reckons that although oil companies have shown greater competitiveness in 2002, their service stations continue to diminish at a rate of 800-1,000/year.
Distribution margin erosion
In addition, there is continuous erosion of the distribution margin, which lies well below the European Union's average. The industry, nevertheless, is pursuing its investments to adapt its production units and reconfigure its networks, as well as develop increasingly environmentally friendly products. In the refining sector alone, investments announced exceed 1 billion euros during 2003-05.
In this context, Total is investing 20 million euros in a new gasoline desulfurization unit on its Flanders refinery, near Dunkirk to meet the 50 ppm sulfur EU specifications for 2005, and will be ready for the next 10 ppm stage later on. The diesel oil unit will benefit from the same treatment during its 5-year shutdown in 2004.
BP France Pres. Michel de Fabiani announced earlier this month projects for the Lavéra site on the French Riviera. BP will spend about 13 million euros to reduce by two thirds the volatile organic components (VOCs) emitted by the ethylene oxide unit; work is expected to reach completion by yearend or in early 2004.
In 2004, air gases group Messer Grisheim will double its recovery capacity to 120,000 tonnes/year from the ethylene oxide unit as well as the hydrocracker. Messer Grisheim recovers 60,000 tonnes/year of CO2 from the BP ethylene oxide unit on the Lavéra site. The consequent CO2 reduction will be part of BP France's commitment to the government to reduce its greenhouse gases in the framework of an industry engagement to avoid the CO2 tax.
