Coryton refinery closure threatens 850 jobs
06 June 2012
The Coryton refinery in Essex is to close, according to administrators PwC. Its Swiss owner, Petroplus, filed for bankruptcy earlier this year. There are likely to be a "substantial" number of redundancies among the 500 workforce, PwC said, while around 350 contractors will learn their fate within the next few days.
Coryton is the latest European refinery to close because of an oversupply of refined products
PwC said it had failed to find a potential purchaser for the refinery, which supplies 20% of London and South East England’s fuel.
The remaining UK refineries are situated 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.
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."
PwC entered into an arrangement in February which allowed operations to continue at the Coryton refinery while various restructuring and sale options were explored. Some 20 million barrels of oil have been refined in that time.
A spokesman for the Department of Energy and Climate Change said: “We want to reassure people that there will not be any impact on fuel supply from this development. Continuing jetty operations at Coryton means that there should be no loss of supply through the terminal to London and the South East.
“Closure of the refinery reflects overcapacity in the European refining sector and a number of other refineries have closed across Europe in recent years.”
According to a report in the Guardian on June 3, there was speculation that the refinery at Milford Haven in Wales could also shut because of overcapacity.
Volker Schultz, the chief executive of Essar Oil UK, owner of Stanlow refinery on the Wirral, said Coryton has been hit by a perfect storm. British drivers are using more fuel-efficient cars which has cut demand and there has been growing use of biofuels, which do not need refining. To compound this, big refineries being built in the Middle East and Asia – Essar is an Indian conglomerate – have created a glut in capacity.
Shultz said: "In the north Atlantic basin [east US, UK and northern Europe] alone, you hear that 10 to 20 Corytons would have to shut down to get the north Atlantic market into a balanced state. There is quite a considerable amount of overcapacity."
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