Concerns over conduct of bosses at Lincolnshire site, with ministers saying workers had been ‘badly let down’
‘It breaks my heart’: how a refinery closure is hitting jobs and politics
The government has called for an investigation into the conduct of bosses at one of the UK’s largest oil refineries after it collapsed into administration on Monday, prompting concern about job losses and disruption to fuel supplies.
Sources familiar with the situation said that government officials had been growing increasingly fearful about the finances of State Oil, which owns the Prax Lindsey refinery in northLincolnshire, since April.
The heavily lossmaking company assured ministers it was in good health during a meeting at the Prax site in May but is understood to have suddenly admitted in the past week that it was on the verge of insolvency.
The company, the only British business to own one of the UK’s five key refineries, is understood to have failed to comply with multiple requests from Westminster to open its books as it plunged towards failure.
The government said workers had been “badly let down”.
The energy secretary, Ed Miliband, is now understood to be considering whether the wider oil refinery sector – which is struggling with low profit margins – should be allowed to tap a financial support scheme announced in last week’s industrial strategy and originallytargeted at energy intensive sectors such as steel.
StateOilcalled in administrators on Monday, Sky News reported first.
The failure is likely to cause a headache for government officials, given that the company’s 5.4m tonne-a-year capacity represents almost a tenth of the national total. The eight divisions of Prax Group that are in administration employ a combined 625 people.
Miliband is writing to the Insolvency Service to demand “an immediate investigation into the conduct of the directors, and the circumstances surrounding this insolvency”.
The sole director of Prax Lindsey Oil Refinery Ltd is Winston Soosaipillai, a seldom-seen Surrey-based investor who is also the company’s ultimate controlling party along with his wife, Arany.
Michael Shanks, a minister in the Department for Energy Security and Net Zero, lashed out at the company’s leadership.
“There have been longstanding issues with this company and workers have been badly let down,” said Shanks, adding that the company had left the government with “very little time to act”.
Officials are understood to believe that only weeks remain to find buyers for parts of the business, to ensure the refinery can continue functioning as normal.
Shanks said the government was working with the official receiver, an employee of the Insolvency Service who manages nationally significant corporate bankruptcies, such as thefailure of outsourcer Carillion, to determine the next steps.
“This will include urgently reporting back on all potential uses of the site, prior to a wind-down of the refinery,” he said.
“The government believes that the business’s leadership have a responsibility to the workers and the local community. We call on them to do the right thing and support the workers through this difficult period.”
State Oil is part of the Prax Group, which bought the company from the French oil group Total in 2021 and is majority owned by the Soosaipillais. A further 20% is held by family trusts connected to them. A Westminster source said Winston Soosaipillai had “serious questions” to answer.
Lindsey is the only one of the UK’s five leading oil refineries to have a UK owner; the remainder have US and Indian parent companies.
The group also has oilfield investments in Shetland and owns roughly 200 petrol stations in the UK under the Breeze and Harvest Energy brands, but these are outside the insolvency process.
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The City consultancies FTI Consulting and Teneo have been appointed by the government’s official receiver to manage the Lindsey refinery and as administrator, respectively.
Sharon Graham, the general secretary of Unite, said: “The Lindsey oil refinery is strategically important, and the government must intervene immediately to protect workers and fuel supplies.
“Unite has constantly warned the government that its policies have placed the oil and industry on a cliff edge. It has failed to act and instead put its fingers in its ears.
“The government needs a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.”
The administrator of the company, Teneo, said: “On 30 June 2025, the high court appointed the official receiver as liquidator [and] appointed special managers from FTI Consulting LLP to assist the liquidator in ensuring the continued safe operation of the site.”
The joint administrator Clare Boardman, of Teneo, said that all options would be considered, including a sale of Prax’s upstream business and retail operations in the UK and Europe, all of which remain outside insolvency.
The government said it would intervene to ensure energy security is not disrupted. Prax’s major crude oil supplier is the international commodities trader Glencore, which also has a claim over some of the company’s assets, if it cannot pay its debts.
It is thesecond time in four yearsthat Prax Lindsey’s financial performance has become a matter for government officials.
In 2021, the company said it had swung from a £1.9m profit to a £228m loss in the year to February 2021, hurt by the Covid pandemic crushing demand for fuel.
That year, the French oil company Total sold the refinery to Prax, a unit of a little-known outfit headquartered in Surrey called State Oil, which has grown at meteoric pace, its revenues surging nearly tenfold between 2010 and 2020.
Its controlling party, Soosaipillai, who goes by his middle names of Sanjeev Kumar, is rarely spotted in public or at industry events and has almost no public profile.
The Guardian has approached the Prax Group and FTI Consulting for comment.
