UPDATE 4-France taps fuel reserves as strike hits pumps

* France has some 98 days of strategic oil reserves

* Workers at 12 refineries still on strike on Monday

* Government threatens to use force if blockages continue

* Feyzin, Donges to strike beyond Tuesday’s national protest

(Adds details on refinery strikes, Carrefour comments)

By Muriel Boselli and Valerie Parent

PARIS, Oct 18 (BestGrowthStock) – France began to tap emergency fuel
reserves at the start of a second week of action by refinery and
port strikers as a growing number of petrol stations began to
run dry on Monday.

The Paris-based International Energy Agency (IEA), which
overlooks strategic oil supplies in OECD countries, said France
had some 98 days of oil stocks and that the country had started
to draw on the industry’s 30-day emergency reserves.

Asked whether France had started to use its strategic
industry reserves, Aad Van Bohemen, the head of the emergency
policy division told Reuters: “It’s already doing so.”

Workers at two Total refineries vowed to pursue protests
beyond the national day of protests on Oct. 19. They voted to
extend their week-long strike at the Feyzin and Donges
refineries until Wednesday and Friday, respectively.
[ID:nWEA2804][ID:nWEA2798]

Nationwide strikes over pension reforms have spread to the
country’s 12 oil refineries over the past seven days, adding to
the impact of a three-week-long strike at France’s largest oil
port, Fos-Lavera, over working conditions and a port reform.

On Monday, French truck drivers also staged go-slow
operations on highways, and rail strikes intensified as protests
gathered pace ahead of a Senate vote on the pension overhaul.

All but one of France’s 12 refineries had stopped
production, and some refiners started to declare force majeure.

Exxon Mobil (XOM.N: ), which operates two French refineries,
said it was in the process of declaring force majeure on a
number of French fuel supply contracts to supermarkets.

“These are contracts with big volumes,” the spokeswoman
said.

On Friday, British chemical firm Ineos declared force
majeure on one product from its refinery near Fos-Lavera, the
first such action since the strikes began.

MADNESS

Motorists rushed to petrol pumps to fill up, but many were
already closed or out of at least one oil product.

“It’s madness. We’re submerged,” said Paula, manager of a
Champs Elysee service station.

According to a Reuters estimate, up to 1,800 petrol stations
out of a total of 12,500 were hit by shortages. But the
situation on the ground is changing rapidly.

The union of independent oil importers said between 500 and
1,000 petrol pumps they service at supermarkets were either
running dry or had a shortage of one product. Supermarkets run
60 percent of French petrol pumps.

At Carrefour, Europe’s biggest retailer and France’s
second-largest pump operator, said station managers could decide
to limit transactions to 50 euros and shut stations at night
time to avoid panic buying.

Exxon Mobil’s Fos-sur-Mer refinery in southern France was
still operating at minimum output and was expected to do so
until Oct. 21-22, a CFDT union official said.

“The situation is critical,” an Exxon Mobil spokeswoman said
earlier. “Anyone looking for diesel in the Paris and Nantes
(Western France) regions will have problems.”

The powerful CGT union, which represents most refinery and
port workers, used the port strike as a lever for wider action
against French President Nicolas Sarkozy’s pension reform.

The port workers at Marseille are among the most radical
workers’ groups in France and have carried out repeated strikes
over the past few years, which have dented the economic
prospects of France’s largest oil port.

Unions called over the weekend for hardened protests, but
the government said it would resort to force if necessary to
prevent paralysis in the economy.

“When one sees the government’s tougher stance, it only
reinforces the motivation of the troops,” one CGT union official
for workers at Total’s refineries said. “As long as the
government won’t budge, we won’t budge.”

Refinery and port strikers showed no sign of giving ground,
with the prospect of the stoppages continuing at least until
another day of nationwide protests called by unions for Oct. 19.

Gasoline benchmark prices were lower on Monday at $765 a
tonne, down from $768-$777 a tonne on Friday, according to
traders.

“So far, no end to the problems is in sight,” JBC Energy
said. “Still, the capacity reductions are a welcome boon for
refiners elsewhere to cash in on the improved margins
situation.”

Commerzbank commodities analysts wrote in a note to clients
that since the end of September, prices for diesel had risen by
up to 8 percent and for gasoline by up to 14 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Map showing refineries supplied from Fos-Lavera: http://r.reuters.com/zar46p Europe strikes and protests map: http://r.reuters.com/war95p TAKE-A-LOOK on French pension reform protests [ID:nLDE69H1EP] SCENARIOS on whether fuel strikes could derail the pension bill: [ID:nLDE69H0RL] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additional reporting by Zaida Espana, Gus Trompiz and
Matthias Blamont; editing by Jane Baird and Sue Thomas)

UPDATE 4-France taps fuel reserves as strike hits pumps