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Morocco’s Sole Refinery to Be Liquidated by Court Order

Total Refinery

SAMIR, Morocco’s sole oil refinery, will be liquidated, according to a decision made by an appeals court this week.

The refinery’s holding company, Corral, which launched the appeal after a March ruling ordered the liquidation and appointed a trustee to run the entity, made the announcement on Wednesday.

Last August, the company halted production due to “financial constraints,” which left hundreds of employees out of work and pay. Since then, SAMIR has begun paying back the workers the amount owed to them, new reports say.

Related: What’s Really Behind This Oil Price Rally

The trade union Confédération Démocratique du Travail (CDT) has said all of the company’s 1,200 workers have been receiving their salaries and benefits since the closure, though 5,000 other sub-contractors are at risk of losing their jobs depending on the terms of a future buyout.

"We still have hope that someone would buy the company during the liquidation process,” Hussain al-Yamani said, CDT’s leader, said. "Otherwise they can always convert the debt to shares. The government is the biggest creditor anyway."

The facility's unanticipated closure forced the oil-poor kingdom to begin importing the refined product at a time when the government has been trying to reduce budget deficits.

Related: Crude Bounces Back On Pre-OPEC Meeting Rumors

Saudi billionaire Mohammed al-Amoudi owns a two-thirds share in Samir through Corral Holdings. The refinery’s management has been fighting off creditors who have provided billions of dirhams worth of capital to the refinery.

Earlier this year, the Moroccan government said Samir owes the tax administration 13 billion dirhams ($1.33 billion) in unpaid taxes. The refinery’s assets and bank accounts have been unfrozen to allow the facility to restart production at 200,000 barrels per day.

Corporate sources say the three-month restart was authorized in order to attract new buyers for the plant during liquidation.

Total debt, including from private creditors, totals 44 billion dirhams, according to the government, which has confirmed that it will take action to secure corporate funds to make up for the unpaid taxes and protect affected workers.

By Zainab Calcuttawala for Oilprice.com

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