Total promises no refinery closures for five years

REUTERS - Total has promised not to close or sell any French refineries for five years, a union official said on Tuesday, as Europe's biggest refiner came under pressure to keep jobs here ahead of regional elections in March.

The company is instead planning to sell its UK refinery, industry sources said.

The dispute in France has closed all six of Total's refineries and triggered intervention by French President Nicolas Sarkozy.

Strikes will continue, however, until the government organises a meeting to discuss the future of the industry, CGT union representative Charles Foulard said.

A Total official declined to comment beyond saying that the group had made some proposals and that progress has been made.

"We have presented a text with eight proposals on which the two sides will continue to work. The progress is significant," he said.

Sarkozy had asked Total Chief Executive Christophe de Margerie for pledges not to shut refineries and then talks between company management and unions went ahead to try to end a seven-day strike that has hit petrol supply in France.

OUTPUT HALTED

All Total's French refineries had halted output in protest at plans by the company to close its Dunkirk plant as it aims to cut production capacity by 500,000 barrels per day (bpd) by 2011.

The Lindsey refinery in Britain has capacity of about 223,000 bpd.

Sarkozy, whose ratings are close to all-time lows amid rising unemployment, faces regional elections next month, while Britain's Labour government lags the opposition Conservatives ahead of a general election which must be held by mid-year.

Sarkozy's centre-right government is seen as keen to avoid protests and panic buying at petrol pumps. Last month, Sarkozy tried to win assurances from car maker Renault to centre production of a new small car in France instead of Turkey.

European refiners are struggling to cope with low margins and poor demand and several refineries have been put up for sale or sold.

France has over 12,500 petrol stations and Total supplies half of the country with petrol.

Environment Minister Jean-Louis Borloo told Europe 1 radio France was not at risk of running out of fuel and had around 10 days of stocks. "At this point in time, there is no risk of shortage," he said.

But analysts expect shortages to worsen rapidly as the strike spreads and French families take to the roads for school holidays.

Petroleum industry body UFIP said on Monday there were around 7 days of fuel supply left.