Essex: Coryton oil refinery to close, threatening 850 job losses
AN ESSEX oil refinery which fell into administration earlier this year is to close following the failure of efforts to find a buyer or the cash needed to keep it going, putting around 850 jobs at risk.
The Coryton plant by the River Thames, which supplies 20% of fuel in London and the South East, was plunged into administration earlier this year by its Swiss owner Petroplus.
Administrators PwC said the plant would be wound down over the next three months after the challenge of raising the �625 million needed to fund the refinery proved too much.
There are likely to be a “substantial” number of redundancies among the 500 workforce, PwC said, while around 350 contractors will learn their fate in the next few days.
BP, a major customer of the Coryton refinery, said there were many alternative suppliers in the area, and added: “There will be no disruption to our customers.”
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There are seven other refineries in the UK – at 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.
PwC entered into an arrangement in February which allowed operations to continue at the Coryton refinery while various restructuring and sale options were explored. But the administrator said today this was unachievable against a backdrop of an “over-supplied” European refinery market for both buyers and investors.
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PwC said it will now consult with both the trade union and the established staff representative group over their future.
Steven Pearson, joint administrator and partner with PwC, said: “We have worked tirelessly to explore all feasible options for the refinery.
“We have had contact with over 100 possible investors and purchasers. We have been unable to reach a deal to date. The current financing market is exceptionally difficult - capital is short and expensive.”
PwC said it would continue discussions regarding a possible sale over the three months it will take to close the plant.
Close to the M25, the 586-acre Coryton refinery was bought by Petroplus from BP for 1.4 billion US dollars (�714.6 million) in June 2007.
The site became operational in 1953 and produced petrol and diesel, including new “cleaner” fuels, aviation fuels, liquefied petroleum gas (LPG), fuel oils and bitumen.
The shutdown in January sparked fears of fuel shortages after the refinery halted all sales, before they were started again in February.
The refining market has come under pressure in recent years as operating expenses and the cost of crude oil surge at a greater rate than the value of the products.