Fears for 1,000 jobs at refinery

Jan 24 2012

Around 1,000 jobs are at risk after one of the largest oil refineries in the UK fell into administration and stoked fears over fuel supplies.

Coryton refinery in Essex - which supplies 20% of fuel in London and the South East - has halted sales and told its staff it is unsure when supplies will start again.

The shutdown at the former BP-owned refinery - with a total capacity of 175,000 barrels of crude oil per day - comes as Petroplus, its Zurich-based owner, said talks with its lenders had broken down and it had appointed a receiver to the UK refinery.

Linda McCulloch, national officer at the Unite union, said: "One thousand jobs are at risk but we firmly believe that joint action by the owners and Government can help secure the business."

There are seven other refineries in the UK - South Killingholme and Lindsey, both in North Lincolnshire; Fawley, near Southampton; Grangemouth, near Falkirk; Stanlow in Cheshire; and Milford Haven and Pembroke, both in Pembrokeshire.

Petroplus, which saw its credit rating downgraded by Standard & Poor's earlier this month and has suspended shares, said it would also file for insolvency. It previously owned a refinery in Teesside which closed in 2009.

A group of European parliamentarians including East of England MEP Richard Howitt has been meeting to discuss ways to save jobs at Petroplus, which has facilities in France, Germany, Belgium, Switzerland and the UK.

Mr Howitt told BBC Radio 5 Live the refinery was being dragged down by its parent company. He said: "One thousand job losses in Essex will have a devastating impact on the local economy. I don't want to be alarmist about this, but I don't want to be dishonest either. Supplies across London and the South East could be affected and I have been told this could impact the Olympics."

A Department of Energy and Climate Change spokesman said: "The refinery remains operational. We understand that a process is under way to put in place the necessary commercial arrangements to deliver product into the market. Companies have already made alternative arrangements to ensure adequate supply of products are available while these commercial arrangements are being put in place."

Professional services firm PwC confirmed it was appointed on Monday as administrator to the UK arm of Petroplus, which includes the Coryton refinery, an oil storage site in Teesside and a research and development site in Swansea. PwC said Petroplus had suffered as a result of "low refining margins and high restructuring costs".