European refiner Petroplus faces production cuts with credit freeze

The ongoing European debt crisis has begun to seep into the region's industry, with the recent news that Swiss oil refining company Petroplus has had roughly $1 billion of credit frozen by lenders, according to Bloomberg.

The largest oil refiner in Europe, Petroplus operates five refineries with a combined output of 667,000 barrels per day. MarketWatch reports that Petroplus officials insist its refineries have enough crude oil for several days of operations, but the credit will prove critical to continued operation of the plants.

The Wall Street Journal reports that any reductions in runs at the Petroplus refining plants could lead to a substantial increase in energy prices across the continent. Already declining profits had forced Petroplus to consider reducing output to as little as 460,000 barrels per day, but without the necessary credit production could decline even further.

The International Energy Agency explained in a report that "European refiners, plagued by poor profit margins, are reportedly finding it more difficult to secure letters of credit for crude purchases."

Further information on oil refining in the E.U. can be found at PennEnergy's Research area.

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