“With the current market economics we believe there is no way we can operate such a site and make a margin,” Christian Cleret said in an Aug. 12 telephone interview from his office in Geneva. “Operating a hydroskimmer at the moment doesn’t make much sense.”

Refiners such as Petroplus Holdings AG and Preem AB posted losses in the second quarter because of high Brent crude prices caused by armed conflict in Libya that choked off exports. A drop in demand for fuels such as gasoline meant that refiners couldn’t pass on the higher feedstock costs to customers.

Hestya, based in Amsterdam, signed an agreement on Aug. 10 to buy the Wilhelmshaven refinery, tank farm and marine terminal, it said in a statement. The deal is expected to be finalized later this year.

The company wants to invest in the north German site to make it profitable as a terminal, said Cleret, who is 59 and has worked in the energy industry for 30 years. The company is owned by private-equity firms Riverstone Holdings LLC and AtlasInvest, according to its website.

Commercially Viable

“Today our priority is to make the platform commercially viable as a terminal,” Cleret said. Hestya is studying what investments need to be made at the site, he said. That could include more piping, valves and possibilities for blending.

“There is a trend for the large oil companies to disengage progressively from their downstream activity,” he said. That “generates the interest of a new category of actors which are more financial investors originally.”

The Wilhelmshaven purchase will be “the cornerstone of several more investments in the same area of downstream,” he said. Hestya may consider starting the plant if profits rise.

ConocoPhillips said in May it would cut its workforce at the site to 48 from 406 as it sought to use the facility as a terminal. The U.S.-based refiner said in September last year it would keep the facility closed following a fire in May. The plant has the capacity to process 260,000 barrels of crude a day, according to the company’s website.

ConocoPhillips said last month it plans to shed its refining business through a spinoff to free capital for oil exploration and increase returns for investors.

Preem AB, Sweden’s largest refiner, made a loss of 28 cents a barrel in the six months ended June 30 at its Gothenburg plant, the Stockholm-based company said in an Aug. 12 statement.

That compares with a profit of $2.37 in the year-earlier period.

Gothenburg is described as a hydroskimmer refinery, with little upgrading capacity. That means it doesn’t have units able to produce high-value products.

“We had expected Wilhelmshaven to be turned into a terminal given its low complexity,” UBS analysts including Jon Rigby said in a report Aug. 11.