Ministers urged to throw Coryton refinery a lifeline
18 Jun 2012
London – Trade union Unite has called on UK energy and climate change secretary Ed Davey and his ministers to meet workers at the Coryton oil refinery to explain why there is no state aid available to tide the plant over. The Government has so far rejected pleas for intervention, describing the refinery’s financial position as unsustainable.
Joint administrators at PricewaterhouseCoopers (PwC) recently announced.that the Petroplus Refining & Marketing Ltd (PRML) refinery operation in Coryton, UK would close within three months. The cost of keeping the operation running and over-supply in the European refinery sector have made the unit unattractive to potential buyers, PwC said.
The closure of the Essex oil refinery would cost 850 jobs and hit the local economy to the tune of £100 million, research commissioned by Thurrock council has found. Meanwhile, Unite has pointed to the strategic importance of Coryton to the security of UK oil supplies.
Pointing to the Government’s current massive interventions in the banking sector, Unite general secretary Len McCluskey said: “Chancellor George Osborne [has] pledged to pump in at least £100 billion into the banking system to boost lending … in an attempt to build a financial firewall against the situation in Greece.
“Yet, a similar request from Unite for state aid in the short-term to tide over Coryton until a viable buyer is found to take over the oil refinery is dismissed by ministers out-of-hand.”
“Surely it makes more economic sense to provide state aid to tide over Coryton in the short-term until a buyer is found to take over the plant as a going concern. We understand that ministers are already talking to possible purchasers.”
Since the administrators were appointed on 24 January, the joint administrators have explored various restructuring and sale options - either to sell the refinery as a going concern or to refinance its operations. But, said PwC: “The challenge of raising £625 million of funding for the refinery, including the $150m capital expenditure turnaround project ultimately proved prohibitive.”
Work on the turnaround programme has now been suspended, and there was likely to be a large number of redundancies from within the 500 strong Coryton workforce over the next few months.
