Concerns are mounting over the future of hundreds of jobs following the insolvency of the owner of a UK oil refinery, prompting government calls for an “immediate investigation.”
Prax Lindsey Oil Refinery Limited, which operates the plant in Immingham, North East Lincolnshire, entered administration on Sunday, with an official receiver subsequently appointed.
While the refinery directly employs 420 individuals, Unite the Union estimates that the potential impact extends to 1,000 jobs when considering contractors and the broader supply chain.
Energy Minister Michael Shanks expressed concern that workers had been “badly let down” and affirmed the government’s demand for “an immediate investigation into the conduct of the directors and the circumstances surrounding this insolvency.”
Prax Group, under the leadership of Chairman and CEO Sanjeev Kumar Soosaipillai, acquired Lindsey Oil Refinery from French company Total in 2021.
The Department for Energy Security has stated that financial reports indicate the plant incurred losses of approximately £75 million between the 2021 takeover and February 2024.
The department also noted that the company had been “unable to adequately answer” repeated inquiries from the energy secretary regarding its financial status.
Unite’s General Secretary, Sharon Graham, emphasized the refinery’s strategic importance, stating, “The Lindsey oil refinery is strategically important and the government must intervene immediately to protect workers and fuel supplies.”
Graham added, “Unite has constantly warned the government that its policies have placed the oil industry on a cliff edge. It has failed to act and instead put its fingers in its ears.”
She urged the government to implement “a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.”
Minister Shanks reiterated, “There have been longstanding issues with this company and workers have been badly let down.”
He assured that the government would “do everything we can to support workers and the local community.”
Shanks also noted, “The company has left the government with very little time to act.”
FTI Consulting confirmed its appointment as “special managers” to assist the official receiver during the liquidation process.
The firm acknowledged the 420 employees at the refinery but declined to provide further comment.
Teneo has been appointed as administrator for Prax Group’s parent company, State Oil, which employs 182 staff and owns 190 petrol stations in the UK, along with 325 others in Europe.
Clare Boardman of Teneo stated that administrators would be “considering all options for the group, including the prospect of a sale for the group’s upstream business and retail operations in the UK and Europe, all of which remain outside of insolvency.”
According to government sources, Lindsey is the smallest of the UK’s operating oil refineries producing fuel. It is located near the Phillips 66 Humber refinery, the dominant fuel supplier in the region, which continues to operate profitably.
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