Rhône Energies in Exclusive Talks for Acquisition of Esso Fos-sur-Mer Refinery

Rhône Energies, a collaboration between Entara LLC (“Entara”) and Trafigura Pte Ltd (“Trafigura”), has initiated exclusive discussions to purchase the Fos-sur-Mer refinery, along with the Toulouse and Villette de Vienne terminals, from Esso. The potential acquisition is contingent upon formal information dissemination and consultation with employee representatives. Regulatory clearances are also required for its finalization, anticipated by the conclusion of 2024. Financial details of the proposed deal remain undisclosed.

Entara and Trafigura joined forces to create Rhône Energies, leveraging the expertise of a seasoned refinery operator and a leading global player in energy and commodities. Entara, founded by former Crossbridge Energy executives renowned for their adept management of refinery assets, including the Fredericia refinery in Denmark, will oversee operations, maintenance, asset integrity, commercial aspects, as well as health, safety, and environmental performance of the Fos-sur-Mer asset.

Trafigura stands as one of the globe's foremost energy and commodities suppliers, active across 150 nations and facilitating trades exceeding 5.5 million barrels of oil and petroleum products daily. With a three-decade legacy, Trafigura has cultivated extensive experience collaborating with refineries through direct investments, capacity utilization, and supply and off-take agreements.

"We are excited about the prospect of acquiring and managing the Esso Fos-sur-Mer refinery operations. We anticipate engaging with operational management, employee representatives, and government stakeholders in the ensuing weeks and months to reaffirm our dedication to the operation and discuss our future plans," stated Nicholas Myerson, CEO of Entara. "We are steadfast in our commitment to maintaining the operation's exemplary standards of environmental stewardship, safety, and operational performance."

"The Fos-sur-Mer refinery is a proficient, adaptable, and efficiently managed facility strategically positioned on France's Mediterranean coastline," remarked Ben Luckock, Trafigura's Global Head of Oil. " It continues to play a vital role in regional energy security and stands to benefit from Trafigura's expansive global trading and logistics network. As the world transitions towards a low-carbon economy, oil and petroleum products will retain their significance in meeting the escalating global energy demand."

Rhône Energies plans to retain the existing workforce of around 310 employees, who are expected to transition to Rhône Energies upon the completion of the proposed transaction. Additionally, the company is committed to providing a competitive compensation and benefits package, along with opportunities for learning and development, for its workforce.

As per the proposed acquisition terms, Trafigura would engage in an exclusive crude oil supply and product offtake agreement for a minimum of 10 years, entailing ownership of crude oil and product stocks in tanks. These agreements aim to provide the refinery with a stable supply of feedstock as needed, at competitive rates, and a dependable buyer for refined products intended for the local market. Additionally, Rhône Energies would commit to supplying Esso SAF in the region.

Through this intended acquisition, Rhône Energies intends to leverage the refinery's proficient teams and robust manufacturing capabilities. The company seeks to enhance margin capture, crude flexibility, process utilization, and optimize the production of high-value products. Additionally, Rhône Energies plans to prioritize investments in personnel and process safety measures.

Rhône Energies plans to enhance the sustainability of the site by reducing its carbon intensity footprint and pursuing growth projects that expand the co-processing of biogenic feedstocks for renewable fuel production.

The Fos-sur-Mer facility, equipped with a crude oil processing capacity of 140 thousand barrels per day, enjoys several advantages, including direct access to a prominent port, cost-effective operational expenses, and the capability to process various crude oil feedstocks.