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The government has stepped in to fund the official receiver for the safe operation of an oil refinery that is facing financial troubles after its owner declared insolvency. Prax Lindsey Oil Refinery Limited, based in Immingham, North East Lincolnshire, has put approximately 1,000 jobs at risk, including employees, contractors, and the supply chain. Energy minister Michael Shanks addressed the issue in the Commons, urging the owner of Prax Group to provide adequate compensation for the affected workers.
The ownership of Lindsey Oil Refinery transferred from French company Total to Prax Group in 2021 under the leadership of chairman and chief executive Sanjeev Kumar Soosaipillai. Financial reports indicated losses of around £75m for the plant between the acquisition in 2021 and February 2024. The government expressed concerns about the sudden insolvency risk after being previously assured by the company that there were no immediate closure threats to the refinery.
In response to the urgent situation, the government emphasized the importance of maintaining supplies, ensuring energy security, and supporting the workers and local community during this challenging period. Unite’s general secretary, Sharon Graham, highlighted the strategic significance of the Lindsey oil refinery and called for immediate government intervention to safeguard both workers and fuel supplies. The Insolvency Service appointed special managers to assist the official receiver throughout the liquidation process, while administrators explore all options for the group’s future, including potential sales of business units in the UK and Europe that are not in insolvency.
Lindsey Oil Refinery is considered the smallest of the UK’s fuel producers, located near the Phillips 66 Humber refinery, which remains profitable and a major fuel supplier in the region. Despite the challenges faced by Prax Group and the uncertainties surrounding its operations, the government is committed to finding solutions to support the affected workers and maintain operational integrity within the oil industry
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