The government is calling for an immediate investigation as the owner of a UK oil refinery has gone into administration, putting hundreds of jobs at risk. 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 refinery employs 420 workers, but according to Unite the Union, 1,000 jobs are at risk when considering contractors and the supply chain.
The energy minister, Michael Shanks, expressed disappointment in the situation and demanded an investigation into the conduct of the directors and the circumstances surrounding the insolvency. Prax Group, led by chairman and CEO Sanjeev Kumar Soosaipillai, acquired the Lindsey Oil Refinery from Total in 2021. However, the Department for Energy Security revealed that the company had been experiencing significant losses since the takeover and was unable to provide satisfactory financial reports to the energy secretary.
Unite’s general secretary, Sharon Graham, is urging the government to intervene in order to protect workers and ensure fuel supplies. She also criticized the government’s policies for putting the oil industry in a precarious position. Meanwhile, Shanks assured that the government will do everything in its power to support the affected workers and community.
The company has appointed FTI Consulting as special managers to assist with the liquidation process. However, they have not provided any further comments on the situation. Prax Group’s parent company, State Oil, has also gone into administration, with Teneo appointed as the administrator. Teneo’s Clare Boardman stated that all options for the group, including a potential sale of its business and retail operations, will be considered.
According to the government, Lindsey Oil Refinery is the smallest of the UK’s oil refineries and is located next to the profitable Phillips 66 Humber refinery. The government has also urged the public to share any relevant information on the situation.