One of Britain’s last remaining oil refineries is at serious risk of closure following the financial collapse of its parent company, State Oil. The company, which also owns the Prax Group and operates about 200 petrol stations across the UK, has entered administration after suffering escalating losses at its Lindsey Oil Refinery in Lincolnshire.
The refinery, one of just five major facilities still operating in Britain, accounts for around 10% of the country’s refining capacity. It employs approximately 440 workers and produces a broad range of fuels, including petrol, diesel, aviation fuel, and bitumen.
The closure threat comes amid broader concerns about the future of the UK’s oil and gas sector, particularly in light of the Labour government’s decision to ban new drilling in the North Sea. Earlier this year, the Grangemouth refinery in Scotland also shut down, intensifying fears of industry decline.
On Monday, the Official Receiver was appointed to oversee the safe operation of the Lindsey site, while corporate advisory firm Teneo was brought in to manage the administration process for the wider State Oil group. A government statement is expected shortly, as it is customary for the state to intervene in the management of hazardous industrial sites when insolvency occurs.
Union leaders have called for urgent government action. Unite, which represents hundreds of Lindsey workers, warned that the refinery’s collapse could have severe consequences for energy security and local employment. General Secretary Sharon Graham said: “The Lindsey oil refinery is strategically important, and the Government must intervene immediately to protect workers and fuel supplies.”
Accounts show that Lindsey’s losses nearly doubled to £53 million in the year to February 2023. In contrast, Prax’s petrol station network and North Sea oil and gas assets remain profitable. Administrators are now racing to find buyers for these parts of the business.
Teneo said it is assessing all available options, including a potential sale of Prax’s upstream and retail operations, which are not part of the insolvency proceedings. Clare Boardman, joint administrator, acknowledged the challenges ahead: “We appreciate this is a very difficult and uncertain time for the employees and everyone involved. We will be on site to support them throughout the process.”
The future of the Lindsey refinery and its workers now hinges on whether a buyer can be found or the government steps in with a rescue plan.
