Royal Dutch Shell has cut refinery throughput at its European plants by up to 10 per cent due to deteriorating margins, a senior Shell refining official said yesterday. Shell's total European refining capacity is around 1.7 million barrels per day (bpd), so the current cuts point to a reduction in the intake of feedstocks, mainly crude oil, of up to 170,000 bpd.

The Shell official said the cuts were between "zero and 10 per cent" depending on nameplate throughput at each refinery. "It is quite clear that (refinery) margins are weak," he said when asked why a decision to cut throughput had been taken. BP Amoco, which controls 1.27 million bpd of European refining capacity, said however that it was not implementing any run cuts across its European system that were linked to the margins picture.

"Refinery economics is obviously not very pretty at the moment," a BP refinery official told Reuters. "And margins are weak enough that they are under intra-day review." But he added, "The only cuts we would be making at the moment would be to do with turnarounds, not margins." He did not elaborate on BP's planned maintenance programme.

And a trader with Exxon Mobil said the U.S. major, the biggest refiner in Europe, had not cut runs as sophisticated units were still reasonably profitable. Reuters calculations show basic Rotterdam refineries losing about $1 a barrel over the past week, but upgraded plants still making profits of 36 cents a barrel. Miro, the biggest refiner in Germany, said its 300,000 barrels-per-day refinery at Karlsruhe was running at full capacity.

Austria's OMV and Finnish energy group Fortum also both indicated their plants were being operated at maximum capacity. A trader with Statoil also said the company was running its refineries in Norway and Denmark at full capacity. "There's no change yet and I don't know if we will react to (worsening) margins," he said.

Paris-based trading house Dreyfus is the only other company that has confirmed run cuts at its sole European refinery, a 222,000 bpd facility at Wilhelshaven, Germany. The company said last week it had reduced crude throughput at Wilhelmshaven by 10 per cent due to poor margins. Mediterranean refineries are losing much more money than those in the north,

but Spanish refiner Repsol and Italy's Agip - part of the ENI group - have said they are not cutting production.