Energy Minister Michael Shanks said the firm’s collapse was ‘deeply concerning’
The parent company behind one of Britain’s largest oil refineries has collapsed into administration, sparking immediate concerns over the nation’s fuel supplies and the livelihoods of hundreds of workers.
State Oil, which owns the Lindsey refinery in North Lincolnshire through its Prax Group subsidiary, appointed administrators on Monday.
This move was swiftly followed by a separate winding-up order issued against the Lindsey oil refinery itself and its related businesses, with a liquidator now appointed.
The collapse directly impacts more than 180 staff employed by State Oil, alongside an estimated 440 workers at the Lindsey refinery.
Trade union Unite has urgently called for government intervention, warning that the firm’s failure could severely jeopardise UK oil supplies, leaving the country on a “cliff edge”.
The situation is particularly critical given that the Lindsey site is one of only five large oil refineries remaining in the UK, following the recent closure of the Grangemouth plant in Scotland.
Unite general secretary Sharon Graham 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 and gas 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.”
Energy Minister Michael Shanks said the firm’s collapse was “deeply concerning” and said the company had left the Government with “little time to act”.
He said: “There have been longstanding issues with this company and workers have been badly let down.
“The Secretary of State is today writing to the Insolvency Service to demand an immediate investigation into the conduct of the directors and the circumstances surrounding this insolvency.
“The Government will ensure supplies are maintained, protect our energy security, and do everything we can to support workers and the local community, including engaging with trade unions and industry bodies.”
He added: “The Government believes that the business’s leadership have a responsibility to the workers and the local community.
“We call on them to do the right thing and support the workers through this difficult period.”
Built in 1968, the Lindsey refinery can process around 113,000 barrels of oil a day.
Clare Boardman, joint administrator of State Oil and Prax, said: “We appreciate that this is a very difficult and uncertain time for the employees and everyone involved and we will be on site to support them during this challenging period.
“We will be considering all options for the group, including the prospect of a sale for the group’s upstream business and retail operations, such as petrol stations, in the UK and Europe, all of which remain outside of insolvency.
“We thank the group’s team members and other stakeholders for their continued support.”
Prax Group was not immediately available for comment.
