Lindsey Oil Refinery to Close as No Buyer Found for Prax Site

The Lindsey oil refinery in Lincolnshire is set to shut its doors after administrators failed to secure a viable buyer, placing 625 jobs in jeopardy and creating ripples across the UK’s energy industry. Staff were notified by email that the attempted sale, initiated after the business entered administration in June, did not result in a “feasible and deliverable” offer for the facility, which contributes approximately 10% of the United Kingdom’s refining capacity.

The announcement means no further crude oil will be ordered for processing at the site, prompting an imminent move into a wind-down phase to deal with the remaining crude on hand. Employees face the prospect of phased redundancies, although none are expected before the end of October. The news arrives as a blow to the community around Immingham, where crude imports arrive for the only refinery in the area.

Energy Minister Michael Shanks expressed deep disappointment at the situation and cited the “untenable” financial state left by former owners Winston Soosaipillai and his wife Arani. The Prax Group, which they controlled, buckled under debts of nearly £250 million owed to HM Revenue and Customs. Legal action for breach of fiduciary duty is now underway against Sanjeev Kumar Soosaipillai, with the government urging the couple to make a voluntary contribution to support affected workers.

The Soosaipillais, who built the Prax Group from a single petrol station into a diversified oil conglomerate turning over £10 billion, stand accused of pursuing an aggressive, debt-driven expansion strategy. Over the years preceding the collapse, they withdrew more than £11 million in pay and dividends, a period now under scrutiny as calls grow for a full investigation into their stewardship.

Various proposals were received for individual assets of the Prax Lindsey operation, including storage, distribution, and refining facilities. While some talks remain ongoing and could preserve limited local employment, the outlook for most of the 625 workers remains bleak.

The government has pledged immediate funding for a comprehensive training guarantee, designed to equip displaced refinery workers with skills for roles in the fast-growing clean energy sector. The official receiver, an arm of the Insolvency Service, continues to seek buyers for parts of the operation in hopes of salvaging some jobs and economic activity for the community.