Prax Oil Refinery Collapses Leaving Hundreds of Jobs in Jeopardy at Key UK Facility

One of Britain’s last remaining oil refineries has fallen into administration, triggering urgent government intervention and putting approximately 400 jobs at risk. The Prax Lindsey facility, situated on the River Humber, has ceased operations after the Insolvency Service issued a winding-up order against the company.

Energy Secretary Ed Miliband has demanded an immediate investigation into the collapse of the facility, which produces roughly 10% of the nation’s oil output. The development comes as a significant blow to the UK’s domestic refining capabilities, leaving only four major refineries operational across the country.

The government has expressed deep concern over the management’s handling of the situation. Junior Energy Minister Michael Shanks revealed that despite previous reassurances, the company abruptly changed its position regarding the facility’s viability. The minister criticised the wealthy ownership for failing to provide crucial financial information that could have potentially enabled government intervention.

The Prax Lindsey site, capable of processing 113,000 barrels of oil daily, has struggled financially since its acquisition from Total in 2021. Financial reports indicate losses of approximately £75 million between the acquisition and February 2024, with the company citing low margins, elevated energy costs, and mechanical difficulties as contributing factors.

Unite union’s General Secretary Sharon Graham has emphasised the strategic importance of the refinery, calling for immediate government action to safeguard both workers’ interests and national fuel supplies. The collapse follows the recent closure of Ineos’s Grangemouth facility, further diminishing the UK’s domestic refining capacity.

Administrators from Teneo have been appointed to handle the insolvency of State Oil, the parent company, while exploring potential sales opportunities for the group’s upstream business and retail operations across the UK and Europe. The broader State Oil group maintains ownership of various brands, including North Sea oil and gas production assets and multiple petrol station chains operating under the Harvest Energy, Total Energies, and Breeze brands.