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Coryton: Refinery Assets Sold
The assets of Coryton oil refinery have been sold by administrators.
The fate of stricken oil refinery Coryton was sealed today when administrators confirmed the site will be converted into an import terminal after they failed to find a buyer to keep the plant going.
The Essex refinery, which supplies 20% of fuel in London and the South East, will be closed over the next three months after PricewaterhouseCoopers (PwC) struck a deal to sell most of the assets.
A consortium comprising oil giant Shell, Royal Vopak and Greenergy will buy the site for alternative use after PwC abandoned hopes of finding a buyer for Coryton as a going concern after a five-month search.
PwC said there would be no change to the redundancy programme, with 180 out of around 850 staff and contractor jobs to be cut by the end of June and further redundancies planned from late July onwards.
Linda McCulloch, national officer of Unite, said it was "devastating news'' for the workers, adding: "They feel they have been led up the garden path by the administrators and let down by the Government.
"This will have huge economic consequences, not just in the region, but on the UK economy and will undermine the refining industry.
"It confirms our suspicion that this was the plan all along. We will do all we can to achieve justice for our members at Coryton, who have worked tirelessly to try to save one of the most efficient refineries in Europe.''
Energy minister Charles Hendry said he was seeking to help affected workers, but stressed there would be substantial investment in the site by its new owners, with plans for some recruitment.
He said: "We are doing everything we can to help these skilled people to find new posts, and are working with the Thurrock Council taskforce, local agencies and Jobcentre Plus to ensure they get the support they need at this difficult time.
"There is however some comfort in this announcement for the local community.
"Vopak, Greenergy and Shell have committed to investing a substantial amount in the site to develop it as a state-of-the-art import terminal. This includes paying for enhancements to the infrastructure that will keep the site viable for many years.''
The buyers are expected to create around 50 jobs directly at the site, with additional jobs available for contractors with skills in maintenance, security, engineering, truck driving and construction, according to Mr Hendry.
The administrator said it was "regretful'' that a sale as a going concern could not be achieved.
Steven Pearson, joint administrator and partner with PwC, said: "Ultimately, the administrators have a legal responsibility to achieve the best price possible for the assets and we have been able to obtain the highest price by selling the site for an alternative use.
"We understand that the joint venture partners intend to develop the site in due course, which we hope will provide an important and stable source of supply of fuel for the foreseeable future.
"We recognise that the closure results in the redundancy of the majority of the employees at Coryton and we intend to work with the local agencies and authorities to provide assistance during this difficult time.''
PwC will now oversee the removal of all crude oil from the site and ensure the safe closure of the refinery.
Close to the M25, the 586-acre Coryton refinery was bought by Petroplus from BP for 1.4 billion US dollars (£896 million) in June 2007.
The site became operational in 1953 and produced petrol and diesel, including new "cleaner'' fuels, aviation fuels, liquefied petroleum gas (LPG), fuel oils and bitumen.
The shutdown in January sparked fears of fuel shortages after the refinery halted all sales, before they were started again in February, when PwC entered into an arrangement that allowed operations to continue while various restructuring and sale options were explored.
The refining market has come under pressure in recent years as operating expenses and the cost of crude oil surge at a greater rate than the value of the products.
Labour's Shadow Energy Minister Tom Greatrex said the Government had "serious questions'' to answer over Coryton's closure.
"It is deeply disappointing that hundreds of skilled workers at Coryton will lose their jobs. Ministers have serious questions to answer about whether the Government could have done more to keep Coryton open as a fully functioning refinery,'' he said.
Phil Whitehurst of the GMB union added: "Even at this late stage the Government should step in and knock heads together to keep open a refinery supplying 20% of the fuel for the region. This is because the other refinery owners have an economic interest in seeing it closed for the chance to keep prices high as crude oil prices drop.''
The future of the refinery will be raised in a Commons debate tomorrow by South Basildon and East Thurrock's Conservative MP Stephen Metcalfe.
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