Corporate: Collapsed South East oil refinery falls into administration 24 January 2012

The operators of one of the UK’s largest oil refineries have gone into administration, with PwC appointed to handle the case.

Petroplus Refining and Marketing and Petroplus Refining Teeside – which supply up to 20% of the South East’s fuel – have collapsed.

Growing financial problems fuelled by ‘low refining margins and high restructuring costs’ have put some 1000 jobs at risk at the Essex-based Coryton refinery.

Partners Steven Pearson and Stephen Oldfield have been named joint administrators of the companies which run the 586-acre site.

Some 500 employees and 350 contractors work at the base which can produce 220,000 barrels a day at full capacity.

Pearson and Ian Green, also of PwC, have also been appointed to sister company Petroplus Refining Teeside which runs an oil storage site in Teeside and a Research and Development base in Swansea, employing some 60 people.

Pearson said: “Our immediate priority is to continue to operate the Coryton refinery and the Teesside storage business, without disruption while the financial position is clarified and restructuring options are explored.”

It came after parent company Petroplus Holdings AG, which is listed on the Swiss SIX exchange, confirmed it had failed to reach an agreement with its lenders and was unable to fund its subsidiaries.

Pearson added: “Over coming days we intend to commence discussions with a number of parties including customers, employees, the creditors and the government to secure the future of the Coryton and Teesside sites.”

Petroplus has debts of £1.1bn and concerns have been raised the South East’s forecourts could face distribution delays.

Speaking on BBC Radio 5 Alive, East of England MEP Richard Howitt, warned supplies across London and the South East “could be affected” and “could impact the Olympics”.

By Andy Pearce