The future of a major UK oil refinery has been secured after its purchase by an American energy giant, safeguarding hundreds of local jobs in the short term.
Deal Sealed After Administration Collapse
The Prax Lindsey oil refinery in North Killingholme, Lincolnshire, has been bought by US rival Phillips 66 after collapsing into administration in June of last year. The site, one of only five remaining refineries in the UK, ceased production immediately upon its financial failure. The UK arm of the Texas-based Phillips 66 has now acquired the assets, though the final price of the deal has not been disclosed.
The government's official receiver took control of the Lindsey operation following the collapse of its owner, Prax, and initiated a bidding process to find a new buyer. Gareth Allen, the official receiver at the Insolvency Service, stated that the agreement with Phillips 66 represented the "best possible outcome for creditors."
Integration and Immediate Plans
Phillips 66, which already owns the neighbouring Humber Refinery, plans to integrate the former Prax operations with its existing site. Crucially, the company confirmed it will not restart the Lindsey refinery in its current form, stating it is not viable. Instead, the acquisition is intended to enhance operations at the larger Humber facility and improve the supply of fuel to UK customers.
Regarding the workforce, the Insolvency Service confirmed in December that the 250 employees still at the site—following 125 redundancies made in October—are guaranteed employment until at least the end of March. Their long-term prospects, however, remain uncertain as the site's operations are wound down and merged.
A Failed Empire and Legal Action
The refinery's troubles stem from its acquisition in 2021 by Winston Soosaipillai, also known as Sanjeev Kumar, and his wife Arani, who aimed to build an energy empire. Their venture, which also included a North Sea oilfield and hundreds of petrol stations, unravelled last year amid alleged "irregularities" relating to the group's debts.
By the time of its collapse, the Prax Lindsey refinery, which was responsible for 10% of UK fuel production, had a mere £203 left in its bank account. This followed a demand from commodities trader Glencore for repayment of $53.6m in debt for crude oil supplies. Soosaipillai is now being sued by administrators for breach of his duties as a director, and his current whereabouts are unknown.
Boost for Energy Security and Local Economy
UK Energy Minister Michael Shanks welcomed the sale, stating: "Phillips 66 is an experienced and credible operator, and today’s sale agreement allows them to quickly expand operations at its neighbouring refinery... This will expand the company’s ability to supply fuel to UK customers, boosting domestic energy security and securing jobs." He added that the deal is expected to create hundreds of new construction jobs in the region over the next five years.
Paul Fursey, Phillips 66's UK lead executive, expressed sympathy for the workforce and community affected by the closure. "This sale is the best way forward to secure jobs, bolster the local economy and encourage investment in the region," he said. The deal marks the end of a turbulent chapter for the Lincolnshire refinery and opens a new phase of consolidated operations under one of the world's largest energy companies.
