Coryton refinery job fears after Petroplus go bankrupt
- 24 January 2012
- From the section UK
Hundreds of jobs at the Coryton oil refinery in Essex are under threat after Swiss owner Petroplus said it would file for bankruptcy.
Administrator PricewaterhouseCoopers says the priority is for work to continue at the refinery without disruption.
Other firms say they will still be able to supply fuel, but petrol retailers fear diesel prices will spike.
Energy Minister Charles Hendry said there was no need to stock up on fuel.
Steven Pearson, on behalf of the administrator, said: "Our immediate priority is to continue to operate the Coryton refinery and the Teesside storage business without disruption while the financial position is clarified and restructuring options are explored."
He said there were plans to have a number of discussions during the next few days over the future of the site in Coryton and the business in Teesside.
Petroplus has said it will file for insolvency "as soon as possible" after failing to reach an agreement with creditors to extend deadlines for loan repayments.
'Part of community'
As well as refining oil for use as fuel, the Coryton site - which is one of eight refineries in the UK - also imports fuel from other countries which has already been refined.
It also supplies 20% of fuel for south-east England.
Although several lorries left the site before 0730 GMT on Tuesday, there has been no reported movement since.
Russell Jackson, an employee and representative of the Unite union, told the BBC the refinery had been at the site since the 1950s and was very much part of the local community, which would be heartbroken if it closed.
"There are also many contractors that work on site and rely on Coryton for their living as well," he added.
"People don't know what's going to happen and are insecure about the future but people are hopeful something will be done to resolve the situation and a buyer might be found."
He said he hoped the government was concerned about the situation, and warned the UK should not have to solely rely on its energy needs coming from third parties or imports.
East of England MEP Richard Howitt also said he feared petrol supplies would be affected and any job losses would 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," he said.
But Mr Hendry said: "There is no need at this stage to be concerned about what's going on here. It is a matter of great concern for that company but it doesn't have a knock-on impact at this stage to our national security and energy security."
He added there was extra capacity to import more fuel if necessary, but he was confident the refinery would be under new management soon.
Stephen Metcalfe, the Conservative MP for South Basildon and East Thurrock said he was also confident that the plant, which is in his constituency, would survive.
Essar Oil, which owns the Stanlow refinery in Ellesmere Port, has agreed to supply significant volumes of both diesel and petrol to BP, the BBC understands.
Brian Madderson of the Retail Motor Industry (RMI), which represents petrol retailers, told the BBC he expected prices to rise for a number of reasons.
He said the European Union embargo on Iranian supplies of crude oil, the Coryton issues and striking tanker drivers in Lincolnshire were all creating pressure for the industry.
"All of that is going to mean further pressure on price as we have to import for product, and I can see a new record for diesel within days."
The striking Lincolnshire drivers, who work for road haulage firm Wincanton, are in a dispute over pay and conditions.
Unite said the seven-day walkout by 100 of its members, will affect fuel supplies to many Jet garages.
ExxonMobil, the owner of the Fawley Refinery on Southampton Water, told the BBC its stock levels for London and the South East remained good and it would continue to deliver to forecourts as normal.
Meanwhile, it has emerged that although Heathrow Airport has one underground pipe taking jet fuel from Coryton, it also has several others it can rely on and therefore is not believed to have any "immediate worries" for now.