Jobs Risk At Essex Oil Refinery - Sky News

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6:13pm UK, Tuesday January 24, 2012

Nearly 1,000 jobs are at risk after one of the UK's largest oil refineries announced it would halt supplies, as its Swiss owner prepares to file for insolvency.

The Coryton refinery in Essex halted sales on Monday after negotiations with lenders broke down and credit lines were suspended, leading to a default on $1.75bn (£1.12bn) of owner Petroplus' debt.

PwC, which has been appointed as the administrator of Petroplus' UK business, told Sky News the company hopes to resume shipments of petrol and diesel as soon as possible, and the plant remained operational.

Coryton has a total capacity of 175,000 barrels of crude oil per day and is responsible for approximately 20% of petrol supplies to London and the South East.

East of England MEP Richard Howitt has joined European parliamentarians to discuss a way to save the jobs at Petroplus.

He told Sky News: "We're talking about half of those jobs being skilled engineering jobs, well-trained and well-remunerated, in Essex near my region that doesn't have many large employers.

"The impact on the economy, on those workers and their families is utterly devastating.

"And then there's the other half the jobs that are contractors, people like lorry drivers and others, who have already received redundancy notices.

"I find it utterly reprehensible that the Government has stood back and done nothing, and allowed this crisis to develop."

Supplies across London and the South East could be affected and I have been told this could impact the Olympics.

Richard Howitt, East of England MEP

He claimed that supplies across London and the South East could be affected and that the closure of Coryton could impact the Olympics.

But Brian Madderson, chairman of the petrol retailers' group RMI Petrol, told Sky News supplies should not be affected by problems at Coryton.

Meanwhile, Essar Energy has said its refinery in Stanlow was operating as normal, adding: "If there are opportunities to fill gaps in the market caused by the absence of Coryton we would obviously look to do so."

Coryton was bought by Petroplus from BP in 2007 for $1.4bn (£900m).

Shares in the Zurich-based firm stopped trading on the Swiss stock exchange on Monday at the request of the company after losing nearly 85% of their value on Tuesday.

Chief executive Jean-Paul Vettier said: "It is unfortunate to have reached the point where the executive committee and board of directors have to inform our employees, shareholders, bondholders and other stakeholders about these circumstances.

"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.

"We are fully aware of the impact that this will have on our workforce, their families and the communities where we have operated our businesses."