Government to support Lindsay Oil Refinery as a risky employment of 420 people

The government is funding official recipients to ensure the safe operation of the oil refinery after the owner has joined in control, the minister said.

Prax Lindsey Oil Refinery Limited, which owns a factory in Imingham, Northeast Lincolnshire, filed for bankruptcy on Sunday, putting hundreds of jobs at risk.

The refinery has 420 employees, but Unite united that 1,000 jobs could be affected when it comes to terms with contractors and supply chains.

Energy Minister Michael Shanks said that Prax Group owners should “put their hands in their pockets and provide appropriate compensation to workers.”

The workers were “severely disappointed” and the government had “required an immediate investigation into the actions of the directors and the circumstances surrounding this bankruptcy,” he added.

The Prax Group, led by Chairman and Chief Executive Sanjeev Kumar Soosaipillai, purchased Lindsey Oil Refinery from the French company Total in 2021.

The Ministry of Energy Security said its financial report showed that it recorded a loss of approximately £705 million between its acquisitions between the 2021 and February 2024.

Shanks said: “Secretary of State (Ed Miliband) has been relieved from the company that there is no immediate risk of a refinery closure. A week ago, the business changed its position and said it was afraid it’s no longer a concern.

“We repeatedly asked at the official and ministerial level what the financial gap was to determine if the government could help fill that gap, but the company was unable to share that basic information.”

The company had left the government with little time to act, he added.

“The government will do everything it can to ensure that supplies are maintained, protect energy security and support workers and communities, including engaging with trade unions and industrial organizations,” Shanks said.

“The government believes business leadership is responsible for workers and the community.

“We call on them to do the right thing and support the workers throughout this difficult time.”

Shanks said the government is actively looking for buyers for businesses and if that fails, it is looking for other potential uses for the site.

Unite General Secretary Sharon Graham said:

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

Unite’s local officer Mick Simpson said the members were “very worried about their immediate future.”

“This is one of the biggest employers in the Imingham region. So you know that the immediate damage lies in the welfare of people. You’ll have so many people.

“I hope that actions can be taken to protect our jobs and protect our industry,” he said.

Simpson is similar to Scunthorpe’s British Steel Plant, and the government took control earlier this year to protect its future.

He said he hopes that “similar measures” could be implemented “to support oil and gas workers.”

Insolvency Service has announced that FTI Consulting has been appointed as “special administrators” to assist official recipients during the liquidation process.

It has been confirmed that the refinery has 420 employees, but we will not comment further.

Teneo has been appointed administrator of State Oil, the parent company of Prax Group. StateOil employs 182 staff and owns 190 gas stations in the UK, with 325 in Europe.

Clare Boardman, a native of Teneo, said the manager “considers all the options of the group, including the prospects for sales of the group’s upstream business and retail in Europe.”

According to the government, Lindsay is the smallest of the UK oil refineries that produce fuel. Located next to the Phillips 66 Humber Refinery, it is the dominant fuel supplier in the region and continues to make money.