On Monday, June 30, 2025, a significant chapter in the UK’s energy sector took a worrying turn as the Prax Group, owner of the Lindsey oil refinery in northern Lincolnshire, crashed into insolvency. This development threatens hundreds of jobs and raises pressing concerns about the future of one of Britain’s key oil refining sites.
The Lindsey oil refinery, located on a sprawling 500-hectare site near North Killingholme, has been a vital player in the UK’s fuel supply chain. With an annual production capacity of 5.4 million tonnes, it processes over 20 types of crude oil into petrol, diesel, bitumen, fuel oil, and aviation fuels. The refinery accounts for nearly a tenth of the nation’s refining capacity, making its stability crucial to energy security.
Owned by State Oil Ltd, the parent company of Prax Group, the refinery’s financial troubles have been mounting for months. Sources reveal that government officials had growing concerns about State Oil’s finances since April 2025. Despite assurances in May that the company was in good health, it admitted just last week that it was on the verge of insolvency.
The company’s collapse prompted the appointment of administrators and liquidators to manage the fallout. The UK’s Official Receiver was appointed as liquidator for Prax Lindsey Oil Refinery Limited, Prax Storage Lindsey Limited, and Prax Terminals Killingholme Limited following a winding-up order issued on June 30. To assist, the court appointed Matthew Callaghan, Andrew Johnson, Joanne Hewitt-Schembri, and Samuel Ballinger of FTI Consulting LLP as Special Managers to oversee the liquidation process and ensure the refinery’s continued safe operation.
Meanwhile, Teneo was named administrator for State Oil Ltd and Prax Treasury Limited, the parent companies within the Prax Group structure. Together, these entities employ hundreds of people—approximately 180 at State Oil Ltd and around 440 at the Lindsey refinery itself, with many more across the wider group. The total workforce affected is estimated to be over 600, underscoring the human impact of this corporate failure.
Trade union Unite, representing many of the refinery’s workers, voiced urgent calls for government intervention. Sharon Graham, Unite’s general secretary, stressed the refinery’s strategic importance, saying, “The Lindsey oil refinery is strategically important, and the government must intervene immediately to protect workers and fuel supplies.” She further urged for both a short-term plan to keep the refinery operational and a sustainable long-term strategy to safeguard oil and gas workers across the country.
The government has responded by demanding an immediate investigation into the conduct of Prax’s directors and the circumstances leading to the insolvency. Energy Secretary Ed Miliband is reportedly writing to the Insolvency Service to initiate this probe, highlighting the gravity of the situation. Michael Shanks, a minister at the Department for Energy Security and Net Zero, criticized the company’s leadership for longstanding issues and leaving the government with “very little time to act.”
Adding to the complexity, the government is considering whether the struggling oil refinery sector should be eligible for financial support schemes recently announced in the industrial strategy, originally aimed at energy-intensive industries like steel. This move reflects concerns about the sector’s low profit margins and the broader risk to the UK’s energy infrastructure.
The Prax Group’s troubles are compounded by its failure to comply with multiple government requests to open its financial books, a factor that has intensified official scrutiny. The company’s sole director of Prax Lindsey Oil Refinery Ltd is Winston Soosaipillai, a Surrey-based investor who, along with his wife Arani, holds the ultimate controlling interest. Westminster sources have indicated that Soosaipillai faces “serious questions” about the management and governance of the company.
Prax Group’s assets extend beyond the Lindsey refinery. The conglomerate owns roughly 200 petrol stations across the UK under the Breeze and Harvest Energy brands and holds oilfield investments in the Shetland Islands. Notably, these retail and upstream operations are currently outside the insolvency process and may be subject to future decisions by insolvency practitioners. Industry insiders believe there could be buyers interested in these assets, potentially preserving some parts of the business.
Clare Boardman, joint administrator at Teneo, indicated that all options remain on the table, including the potential sale of Prax’s upstream and retail businesses. This approach aims to maximize value and possibly secure ongoing operations despite the insolvency of the core refinery business.
The Prax Lindsey refinery’s history adds context to its current plight. The site was acquired from French oil giant Total in 2021 after a period of financial distress worsened by the Covid-19 pandemic, which saw the company swing from a £1.9 million profit to a staggering £228 million loss in the year to February 2021. Since then, Prax Group, under the ownership of State Oil, experienced rapid revenue growth, nearly tenfold between 2010 and 2020. Yet, this growth has not shielded the company from recent financial difficulties.
Glencore, the international commodities trader, is Prax’s major crude oil supplier and reportedly holds claims over some of the company’s assets in the event of unpaid debts. This relationship adds another layer of complexity to the insolvency process and potential asset sales.
For customers, suppliers, and subcontractors affected by the insolvency, clear guidance has been issued. They are urged to register as creditors by completing a Proof of Debt form available on the UK government’s website and submitting it to the liquidator’s designated email address. This process ensures their claims are formally recognized during the liquidation.
As the official receiver and special managers work to wind up the failing companies in accordance with statutory duties, they also investigate the causes of failure and the conduct of current and former directors. This investigation aims to provide transparency and accountability in the wake of this significant corporate collapse.
The unfolding crisis at the Lindsey oil refinery underscores the fragile state of the UK’s refining industry, which has seen a steady decline in the number of operational sites. Lindsey remains the only one of the country’s five leading oil refineries with a UK-based owner, a fact that has added political and strategic weight to the insolvency.
With weeks left to find potential buyers and secure the refinery’s future, government officials, union leaders, and industry stakeholders face a critical challenge. The priority is not only to protect jobs but also to maintain fuel supplies essential to the nation’s economy and daily life.
In the words of Unite’s Sharon Graham, “The government needs a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.” The coming weeks will reveal whether such a strategy can be realized before the refinery’s fate is sealed.
