The owner of the Lindsey oil refinery has crashed into insolvency, putting hundreds of jobs at risk at the energy conglomerate behind the Lincolnshire site.
Sky News has learnt that State Oil, the parent company of Prax Group, which has oilfield interests in the Shetlands and owns roughly 200 petrol stations, has been forced to call in administrators amid mounting losses at the refinery.
Oil industry sources said an announcement was expected later on Monday.
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One of the sources said the Official Receiver had appointed FTI Consulting to act as special manager for the Lindsey facility, with Teneo hired as administrator for the rest of the group.
About 180 people work at State Oil Ltd, Prax Group’s parent entity, while roughly 440 more are employed at the Prax Lindsey Refinery.
The rest of the group is understood to employ hundreds more people.
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Prax Group is owned by Sanjeev Kumar Soosaipillai, who also acts as its chairman and chief executive, according to its website.
The crisis at the Lindsey refinery, which is located on a 500-acre site five miles from the Humber Estuary, echoes that at Britain’s dwindling number of oil refineries.
According to the company, the site has an annual production capacity of 5.4 million tonnes, processing more than 20 different types of crude including petrol, diesel, bitumen, fuel oil and aviation fuels.
The refinery, which was bought from France’s Total in 2020, is understood to have become a growing drain on cash across the wider Prax Group, with which it has cross-guarantees.
Some of the company’s assets, including the petrol stations and oilfields, are not themselves in administration but will be the subject of insolvency practitioners’ decisions about their future ownership.
It was unclear on Monday morning whether bidders would step in to salvage some of the company’s assets, although industry executives believe there are likely to be buyers for many of its fuel retailing and oilfield assets.
Prax Group also bought its West of Shetland oil assets from Total after a deal struck last year.
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In a statement issued to Sky News, Teneo said it would “urgently assess the position of the company and the wholesale operations”.
“A key priority is to establish the prospect for subsidiaries of the company that remain outside of any insolvency process, including retail operations under the Harvest Energies, Total Energies and Breeze brands in the UK and the OIL! Brand in Europe, Logistics operator Axis Logistics and Prax’s upstream business, formerly Hurricane Energy.
“There are no plans for redundancies at this stage.”
Prax Group could not be reached for comment, while FTI Consulting and the Official Receiver have all been contacted for comment.
