WORKERS at the Coryton Oil refinery in Thurrock are in limbo this morning after the company that operates the site, Petroplus, announced it was filing for bankruptcy and closed down all petrol supplies from the plant.
The decision comes after it defaulted on $1.75 billion of loans and sees around 1,000 jobs at the site under real threat.
In a short statement, Petroplus said: “The primary goal of Petroplus’ Board of Directors is to ensure that operations are safely shut down and to preserve value for all stakeholders,”
Petroplus, Europe’s largest independent oil refinery by capacity, had been in intense talks with its lenders over recent weeks after they withdrew credit last month.
The refinery is a key source of petrol for the south-east, with more than per cent of all supplies coming from there.
BP, which used to own Coryton and sold it to Petroplus in 2007 for $1.4bn, had earlier been in talks to throw the plant a lifeline by supplying it with crude and receiving refined products as payment.
A BP spokesman said the company was “seeking clarification” from Petroplus about the status of Coryton. “We are monitoring the situation very closely,” he said, adding that there were “no immediate supply issues across our retail network.”
An email sent to customers by a marketing manager at Coryton said sales from the refinery had been suspended “with immediate effect”.
It said management was “unsure when supplies will be recommenced.”
Petroplus, based in Zug, Switzerland, and Europe’s largest independent refiner, had about $1 billion in credit lines frozen last month, preventing it from supplying its plants with crude.
“We have worked hard to avoid this outcome, but were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit and refining markets,” Chief Executive Officer Jean-Paul Vettier said in the statement.
Petroplus said last week that it wanted to sell shut-down refineries in France, Belgium and Switzerland, while continuing to operate Coryton and Ingolstadt, Germany.
Petroplus had also been seeking a crude supply deal on terms that would reduce the cash needed to keep refineries going.
The outlook for oil refining in the next two decades is “dire” given excess capacity in the industry, BP’s Chief Economist Christof Ruehl said on January. 18. Other refineries in Europe have been forced to close because overcapacity is making it unprofitable to turn crude oil into gasoline and other fuels.