Cablegate: Strikes Hit French Oil Refineries

This record is a partial extract of the original cable. The full text of the original cable is not available.

071416Z Oct 05

UNCLAS SECTION 01 OF 02 PARIS 006927

SIPDIS

PASS FEDERAL RESERVE
PASS CEA
STATE FOR EB and EUR/WE
TREASURY FOR DO/IM
TREASURY ALSO FOR DO/IMB AND DO/E WDINKELACKER
USDOC FOR 4212/MAC/EUR/OEURA
DOE FOR ROBERT PRICE PI-32

E.O. 12958: N/A
TAGS: EPET ELAB EFIN ECON PGOV FR
SUBJECT: STRIKES HIT FRENCH OIL REFINERIES

1. SUMMARY. Strikes at Total refineries in France will
continue until at least October 7, affecting production of
328,000 barrels per day. The labor dispute at SNMC (Societe
Nationale Corse Mediterrannee), a state-owned ferry company,
further complicated the situation by temporarily blocking
tankers from loading and discharging oil from the Fos-Lavera
Mediterranean hub, a major source of oil exports to the U.S.
and home to a cluster of refineries. END SUMMARY

--------------------------------------------
Employees at Total Gonfreville Pursue Strike
--------------------------------------------

2. On September 20, employees overseeing the distribution
unit of the Total's refinery concern at Gonfreville-L'Orcher
(located in Normandy, near the northern city of le Havre)
decided to call a strike, a decision they reaffirmed on
September 30. In an October 3 meeting, they defined their
strategy for the next days, deciding to continue the strike
until October 7, when they meet again to determine if any
progress has been made on their demands for wage increases
and better working conditions. The refinery is France's
largest, with a capacity for refining 328,000 barrels per
day, supplying between 15-17 percent of the French market
for fuel. Total refines the equivalent of about 2,585,000
barrels per day.

Local Management Rules Out Direct Negotiations
--------------------------------------------- -
3. The representative of the union (CGT), Patrick Varache,
announced that the strike would continue because the local
management of Total-Gonfreville ruled out a monthly 200-euro
wage increase demanded by the 70 employees, asking them to
wait until December 1, the date of annual negotiations.
Vararche mentioned that other employees not working in
Total's distribution unit in Gonfreville were showing
solidarity with the union. Employees argue the company is
making record profits, but employees are losing purchasing
power.

Strikes Could Spread to Other Totals' Operations in France
--------------------------------------------- -------------
4. Strikes could easily spread to other operations of Total
in France. Total's employees generally have shown great
union solidarity. On September 7, a strike immobilized five
of six refineries in France after Total had disciplined four
employees after an incident at a refinery in Provence, in
southern France.

5. The left union CGT rallied support for a strike at Total
to the French giant's refineries on October 4 as part of a
general nation-wide strike. Initially, only employees in
the public transportation sector called for a strike on
October 4, but the strike was observed in other sectors
including education, postal and health sectors as well as
private sector employees. According to initial reports,
around 40 percent of Total's operations in its five
refineries in France were paralyzed by the October 4 strike.

Strike at SNCM Maritime Company Temporarily Complicates the
Situation
--------------------------------------------- ------------
6. On October 1, police were able to clear the Southern
refining hub in the Fos-Lavera area, located near Marseille.
The strike, sparked by a protest over the privatization of
the state-owned ferry company SNCM (Societe Nationale Corse
Mediterrannee), blocked tankers from loading and discharging
oil from the Fos-Lavera Mediterranean hub, a major source of
oil exports to the U.S. and home to a cluster of refineries
amounting to more than 600,000 barrels a day capacity.
Bowing to the pressure, on October 2, the transport unions
called off that strike until October 3 "as a measure of
responsibility."

COMMENT: Prolonged Strikes Could Be Harmful
-------------------------------------------

7. A prolonged strike at Total could be serious because it
occurs at a time when Total has committed to ship more
gasoline to the U.S. to help offset outages caused by
Hurricane Katrina. An escalation of the strike in Total,
Europe's largest oil refiner, could also contribute to drive
gasoline prices higher. That said, French industry sources
are relatively confident that the government, which was able
to put pressure on oil firms to reduce the impact of oil
prices on consumers, once again could come to the rescue and
stave off the spread of this labor dispute. Total itself
should be able to offset lost production levels, thanks to
refineries located in other European countries.
STAPELTON

© Scoop Media