The owner of the Lindsey oil refinery crashed into insolvency, putting hundreds of jobs in danger during the energy conglomerate behind the Lincolnshire site.
Sky News learned that State Oil, the parent company of Prax Group, which has interests on the oil ground in Shetlands and has around 200 service stations, was forced to call administrators in the midst of growing losses in the refinery.
Sources in the oil industry said that an announcement was expected later on Monday.
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One of the sources said that the official recipient had appointed FTI Consulting to act as a special director for the installation of Lindsey, Teneo hired as administrator for the rest of the group.
About 180 people work at State Oil LTD, the Prax Group’s parent entity, while 440 others are used in the Prax Lindsey refinery.
The rest of the group is heard to employ hundreds of additional people.
Prax Group belongs to Sanjeev Kumar Soosaipillai, who also acts as president and chief executive officer, according to his website.
The Lindsey refinery crisis, which is located on a 500-kilometer site from the Humber estuary, echoes the number of oil refineries in Great Britain.
According to the company, the site has an annual production capacity of 5.4 million tonnes, dealing with more than 20 different types of crude, including petrol, diesel, bitumen, oil and aviation fuels.
The refinery, which was bought in total of France in 2020, would have become a growing drain in cash through the larger Prax group, with which it has crossed guarantors.
Some of the company’s assets, including service stations and oil fields, are not themselves in administration, but will be the subject of decisions of insolvency practitioners concerning their future property.
It was not clear on Monday morning if the bidders would intervene to save some of the company’s assets, although industry leaders think that there will be buyers for many of its retail and petroleum fields.
Prax Group also bought its total west of Shetland after an agreement concluded last year.
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In a statement published in Sky News, Teneo said that he “urgently evaluates the position of the company and wholesale operations”.
“A key priority is to establish the perspective of the company’s subsidiaries which remain outside any insolvency process, including retail operations under harvest energies, total energies and breeze brands in the United Kingdom and the Oil brand! In Europe, the logistics operator axis logistics and activities upstream of Prax, formerly Hurricane Energy.
“There is no redundancy plan at this stage.”
Prax Group could not be attached to comment, while FTI Consulting and the official receiver were all contacted for comments.