Calls for inquiry as 420 refinery jobs at risk

Hundreds of jobs are at risk after the owner of a UK oil refinery went into administration – sparking calls by the government for an “immediate investigation”.

Prax Lindsey Oil Refinery Limited, which owns the plant in Immingham, North East Lincolnshire, filed for insolvency on Sunday and an official receiver has been appointed.

The are 420 employees at the refinery, though according to Unite the Union, 1,000 are at risk when taking into account contractors and the supply chain.

Michael Shanks, the energy minister, said workers had been “badly let down” and the government was demanding “an immediate investigation into the conduct of the directors and the circumstances surrounding this insolvency”.

Prax Group, which is led by chairman and chief executive Sanjeev Kumar Soosaipillai, purchased Lindsey Oil Refinery from French company Total in 2021.

The Department for Energy Security said the the company’s financial reports indicated the plant had recorded losses of about £75m between the takeover in 2021 and February 2024.

It said the company was “unable to adequately answer” repeated requests from the energy secretary about its finances.

Sharon Graham, Unite’s general secretary, said: “The Lindsey oil refinery is strategically important and the government must intervene immediately to protect workers and fuel supplies.

“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.

“The government needs a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.”

Shanks said: “There have been longstanding issues with this company and workers have been badly let down.”

He said the government would “do everything we can to support workers and the local community”.

“The company has left the government with very little time to act,” he added.

FTI Consulting said it had been appointed as “special managers” to assist the official receiver during the liquidation process.

It confirmed there were 420 employees at the refinery but would not comment further.

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, from Teneo, said 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 the government, Lindsey is the smallest of the UK’s oil refineries producing fuel. It is located next to the Phillips 66 Humber refinery, which is the dominant fuel supplier in the region and continues to operate at profit.