Minister insists fuel supplies not under threat despite oil refinery closure
State Oil – the parent company of Prax Group, which owns the Lindsey refinery in North Lincolnshire – collapsed into administration last month, putting hundreds of jobs at risk.
Michael Shanks pledged to support the workers who are facing redundancy, but said there is little action the Government can take to improve the statutory redundancy offer.
Speaking in the Commons, he said: 'We have worked urgently to ensure the safety of the refinery site, the security of fuel supplies and to protect workers.
'This has also allowed time for bidders to express an interest in the site.
'Following a thorough process, the official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option.'
He added: 'A package has been offered to all those directly employed at the refinery, which guarantees their jobs and pay over the coming months.
'And alongside the usual support that is offered to workforces in insolvency situations, the Government will also immediately fund a comprehensive training guarantee for those refinery workers to ensure they have the skills needed and the support to find jobs, for example, in the growing clean energy workforce.'
The Lindsey site is one of only five large oil refineries remaining in the UK after the recent closure of the Grangemouth plant in Scotland.
Prax Group is led by majority owner and chairman and chief executive Sanjeev Kumar Soosaipillai, who bought the Lindsey oil refinery from French firm Total in 2021.
Shadow energy minister Andrew Bowie, who tabled the urgent question, claimed 625 jobs are at risk as he pressed the minister for an update on its investigation into the collapse of the company.
He also asked: 'What, if any, assessment has been made into the UK's resilience given the steep reduction in our refining capacity over the past six months?
'What, if any, assessment has been made on the increased reliance on imports that will be necessary as a result of the reduction in British refining capacity?'
Mr Shanks said fuel supplies had 'adjusted' in the past few weeks, adding: 'Our assessment suggests there isn't an immediate risk to fuel supplies locally or in the wider area, but we'll continue to monitor that.'
On the investigation, he said: 'There is not much I can update the House on at the moment, because the insolvency service is carrying out that investigation.'
Conservative MP Martin Vickers, whose Brigg and Immingham constituency includes the oil refinery, said he wanted to see 'the maximum support given to those workers'.
Mr Shanks replied: 'We have looked and pushed and pushed to see if there is more action Government can take to change or to give any additional payments.
'It's not possible for Government to do that, not least because the insolvency service has to follow very specific rules in terms of creditors and what their parameters are to operate in the event of an insolvency.
'But I do think the owners of this company have profited from this business, and they should do the right thing by the workforce that delivered that for them.'
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