UK refinery hit by Petroplus woes

Oil refineryOne of the largest oil refineries in the UK has reportedly stopped fuel supplies after its Swiss owner admitted it was on the brink of collapse.

Coryton refinery in Essex - a key source of petrol in London and the South East - suspended sales on Tuesday and told around 1,000 staff it was unsure when supplies would start again, the Financial Times said.

The shutdown at the former BP-owned refinery - with a total capacity of 175,000 barrels of crude oil per day - comes as Petroplus, its Zurich-based owner, said talks with its lenders had broken down and it would be filing for insolvency.

Petroplus chief executive Jean-Paul Vettier said: "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."

Petroplus, which saw its credit rating downgraded by Standard & Poor's earlier this month and suspended trading of its shares, confirmed it had appointed a receiver to the UK refinery.

A group of European parliamentarians including East of England MEP Richard Howitt have been meeting to discuss ways to save jobs at Petroplus, which has facilities in France, Germany, Belgium, Switzerland and the UK.

Mr Howitt told BBC Radio 5 Live the refinery was being dragged down by its parent company. He said half the jobs were well-paid, highly skilled positions, while the other half were contractors, many of whom have already received their redundancy notices.

He said: "One thousand job losses in Essex will have a devastating impact on the local economy. I don't want to be alarmist about this, but I don't want to be dishonest either. Supplies across London and the South East could be affected and I have been told this could impact the Olympics."

The Unite union said it was in constant dialogue with the owners of Coryton to try to safeguard the refinery, which provides 20% of the fuel supply for the south east of England.

National officer Linda McCulloch said: "One thousand jobs are at risk but we firmly believe that joint action by the owners and Government can help secure the business. We are in constant dialogue with Petroplus and their Swiss owners, and the UK Government about solutions to these developments."

© 2012 Press Association