Closures to more sub-optimally operated oil refineries across the UK and Europe are likely following the failure of the Coryton site in Essex, according to the owner of Britain’s second biggest refinery.
Pressure to run oil refineries in the UK more efficiently was heaped on industry yesterday when FTSE-listed Essar Energy said other oil processing sites face closure in a market being squeezed by big overseas players.
The chief executive of India’s Essar Energy said the larger and better operated refineries – such as its Stanlow facility in Cheshire – will survive in today’s fiercely competitive market but warned that less efficient operations might not, said a report in The Guardian.
Naresh Nayyar said refineries must have the capability to process difficult fuels such as dense crude oil that are cheaper than lighter fuels like Brent crude. Plants also need to be of a certain critical size in order to keep costs per barrel at a profitable level.
Coryton is a key supplier of fuel for the south-east but suffered from price squeezes offered by the giant refineries of the Middle East and Asia. An 11th hour deal postponed the loss of 900 jobs at Coryton until May, but the future of the site is uncertain after its owner Petroplus fell into administration earlier this month.