Lindsey oil refinery to be wound up as parent goes into administration

(Sharecast News) - The owner of the Lindsey oil refinery in Lincolnshire has fallen into administration, it was confirmed on Monday, putting hundreds of jobs at risk. The 500-acre site near the Humber Estuary is owned by Prax Group, part of State Oil.

Prax acquired the refinery in 2021 from TotalEnergies. One of the UK's six refineries, it processes around 100,000 barrels of oil per day.

Teneo has been appointed joint administrator of Prax, while a winding up order has been made against the refinery. FTI Consulting has been brought in by the official receiver as special managers of Lindsey to assist with the liquidation.

The official receiver, Gareth Allen, has been appointed liquidator.

Staff are understood to both still be at the facility, and being paid. It is thought Prax employs around 500 people, with around 180 at Lindsey.

According to Sky News, the refinery - which receives crude oil from Glencore - has struggled as losses mounted.

In a brief statement, the Insolvency Service said: "The official receiver will wind up the companies in accordance with his statutory duties. He also has a duty to investigate the cause of the companies' failure and conduct of current and former directors."

Clare Boardman, joint administrator at Teneo, said in a statement that as administrator for State Oil, all options would be considered, including a sale of Prax's upstream business and its UK and European retail operations.

The upstream assets include the Lancaster oilfield in the North Sea. Prax also has around 250 petrol stations in Britain, including TotalEnergies-branded outlets, as well as sites in Germany, Austria, Switzerland and Denmark.

Energy minister Michael Shanks said Lindsey made losses of around £75m between 2021 and 2024.

He claimed there had been "long-standing issues" with the refinery and that the workers had been "badly let down".

The government would be demanding an immediate investigation into the directors' behaviour around the insolvency, he added, noting: "The company has left the government with little time to act."

Sharon Graham, general secretary of union Unite, said: "The Lindsey oil refinery is strategically important and the government must intervene immediately to protect workers and fuel supplies."

So far neither FTI nor Prax, which was founded by chief executive Sanjeev Kumar Soosaipillai in 1999, have commented.

Soosaipillai and his family are understood to own Prax outright.