Further European oil refineries face likely closure as their prospects of surviving the collapse of parent Petroplus are crushed by reprieves from death row of more profitable U.S. rivals.

Of the five refineries that bankrupt Petroplus owned, Cressier in Switzerland and Antwerp in Belgium have been sold to trading houses Vitol, in a joint venture with private equity house AtlasInvest, and Gunvor.

Decisions on the future of Coryton in Britain and Ingolstadt in Germany are expected shortly, while Petit Couronne in France got a six-month lease of life through a supply agreement with Royal Dutch Shell that expires at the end of summer.

Analysts and market observers think only one or two of these plants will escape being turned into storage facilities, putting at risk thousands of jobs around Europe.

Dozens of refiners have closed in Europe in the past decades as booming Asian economies have built new modern plants and squeezed European companies out of many export markets. Surviving European refineries are largely in the hand of oil majors and Petroplus was the last significant independent operator.

"U.S. product exports are surging, and the return from the dead of U.S. east coast refineries is another nail in the coffin of European refiners," said Seth Kleinman, global head of energy analysis at Citigroup.

A surprise deal announced late last month by U.S. Delta airlines to rescue a 185,000-barrels-per-day (bpd) Trainer refinery in the Philadelphia area is the most recent example of a reprieve for a U.S. refinery that was meant to close.

Carlyle, the private equity group, is in exclusive talks with Sunoco to buy a 330,000 bpd refinery also in the Philadelphia area. PetroChina has offered $350 million plus working capital for the 235,000 bpd Aruba refinery in the Caribbean, owned by Valero Energy.

"U.S. net product exports can go up another 1 million barrels per day. That is one million bpd of European refining that will need to close," Kleinman said.

Trading houses have so far bought Petroplus plants as part of a long-term expansion of their asset bases to improve their ready access to different grades of fuel and to broaden their customer base.

Having physical assets may also help them to get round proposed regulation, on both sides of the Atlantic, that will limit heavy trading of derivatives unless it can be shown to be necessary to hedge physical commodity positions.

In addition to such strategic incentives, trading houses had wrongly anticipated a big improvement in refining margins on the back of large closures of capacity in Europe and the United States from the start of this year.

At one point early this year Europe's gasoline traders were even betting on richer pickings arising from the U.S. summer driving season, despite a grim demand outlook.

Gasoline refining margins did briefly jump higher, but subsequently fell back.

With the reopening of some U.S. plants, which still face a very tough environment themselves, prospects for the sector in Europe are worsening fast.

U.S. refining margins - the premium refineries earn from processing crude into products like gasoline and heating oil - on Friday averaged $18.32 per barrel against $6.45 in Europe, according to Reuters data.

This showed how much more attractive it is to invest in the United States where feedstock crude oil is cheaper.

European margins were lower than those in Asia and the United States for all of 2011 and much of 2010.

US RESOURCES CHEAPER

"The U.S. has access to cheaper natural resources than Europe, where crude is more scarce," said Olivier Jakob at Petromatrix in Zug Switzerland.

He said that the trading houses' approach to the deals showed that they are tentative at best about prospects for the assets they are buying.

"Look at Vitol buying Cressier in a joint venture (with private equity house) Atlas. This shows they were not optimistic about revival of margins, or they would have bought it outright."

He said that of the five refineries Coryton, with its location near London, would be the most likely to survive in the longer term but that this may need government intervention.

Many others will probably soon be converted into storage, mirroring the fate of other European refineries over the past decade, such as the Petroplus Reichstett plant in France and Wilhelmshaven in Germany, bought by Hestya Energy from ConocoPhilips.

"They will run them for a while to show that they gave it a try, but I would not be surprised if they get turned into storage facilities fairly soon," Maarten van Mourik, economist at trading house North Sea Group, said.

How soon will depend on how quickly traders tire of burning cash by effectively sponsoring their downstream operations.

"It's a book keeping exercise. If they have access to it, they may be able to make them profitable by supplying them with cheap crude, but then they are forfeiting profits elsewhere," Van Mourik said.

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