Oil Refining Sector

Richard Tice Excerpts

Wednesday 14th January 2026 Commons Chamber

[Martin Vickers]

The hon. Gentleman is absolutely right that energy costs have played a major part not only in the struggles of Lindsey oil refinery, but in those of other businesses, particularly manufacturing businesses. The Government’s comment that they are not in the business of saving businesses seems rather strange coming from Labour.

Ministers have repeatedly said that there is a legal process that the insolvency practitioners must follow. Of course, I accept that. I have previously said that I feel that the Government are hiding behind the administrators, because they have refused to consider the wider implications of the refinery closure, for example on the local economy, the workforce and national energy security.

I have asked on more than one occasion if the Government would prefer a sale of the whole business that would allow it to resume production. Alarm bells rang for me when I received a letter from the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Leeds North West (Katie White), following my Westminster Hall debate. It said:

“The sales process remains ongoing, with the Official Receiver and Special Managers continuing to engage with all interested parties. However, they have confirmed that none of the credible”—

that is the important word—

“offers received would enable a return to refining operations within the next few years or allow all employees to be retained.”

I note that she refers to “credible” bids—so we have an acknowledgment that there were indeed credible bids—and to a timeframe. That contradicts the Government’s repeated statements that there were no credible bids. Either there were credible bids or there were not. Which is it, Minister?

In fairness to the Minister, when the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) and I met him last week, he did at least acknowledge that the Government would have preferred a sale of the business in its entirety.

[Richard Tice (Boston and Skegness) (Reform)]

Picking up that point, if there was a serious bid to buy the whole site—to invest in it, keep it going, maintain the jobs and grow the number of jobs—surely that should have been taken into account, not only in the interests of the local area, but in the strategic interests of Lincolnshire and the country. Will the hon. Gentleman therefore ask the Minister to ensure full transparency in this whole process so that we can establish whether or not there were credible alternative bids to keep Lindsey oil refinery going?

[Martin Vickers]

The hon. Gentleman supports the point that I was making. I got it in writing from the Under-Secretary that there were credible bids. The issue of credible bids is one of the most important unanswered questions following last week’s announcement about the sale of the assets to Phillips 66, which I should say is an excellent local employer and provides hundreds of well-paid jobs. I have corresponded or met with four consortia that wanted to buy the business in its entirety. When I spoke to the union representative yesterday, he said that there were seven such expressions of interest. The four consortia I have been in contact with referred to FTI Consulting—the agents—and have reached the same conclusion: they have been ignored and not allowed to put forward their case in sufficient detail for any informed judgment to be arrived at.

The Minister will no doubt be aware of an email to the Prime Minister from James Ascot, who is acting on behalf of Axiom. In the email, Mr Ascot said that Ministers

“have publicly stated that no bids were received for the full Lindsey Oil Refinery site that would safeguard the future of refining operations and protect jobs. This statement is factually false. Our company did submit a fully funded, credible bid for the entire site on behalf of our client, expressly structured to preserve and continue operations, safeguard jobs and provide a full credit and liability solution, and a separate cash acquisition value of £400 million… This bid existed.”

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)]

I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate. I know that he and other hon. Members, including my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn), have been engaging closely on this issue with the Minister for Energy, who stands ready to continue to engage with them on the detail.

Let me start with Prax Lindsey oil refinery. It entered insolvency on 30 June 2025 because of the untenable position in which the owners left the refinery, which gave the Government very little time to act. I know how difficult the process has been for the workers, their families and the local community. The insolvency process at the refinery is led by the court-appointed official receiver, who must act independently, in accordance with his statutory duties. Since the insolvency, we have worked with the official receiver to protect workers, and to ensure the safety of the site and the security of fuel supplies. That has also allowed time for bidders to express an interest in the site and its assets.

After a thorough process to identify a buyer for the site, the official receiver has determined that Phillips 66 is the most credible bidder and can provide a viable future for the site. I am glad to say that the sale is expected to complete in the first half of 2026. As many hon. Members will be aware, Phillips 66 is an experienced and credible operator of a Humber refinery, next door to Lindsey. It already supplies fuel to the region and has consistently turned a profit in recent years. The sale allows Phillips 66 to quickly expand operations at its Humber refinery.

The company has decided not to restart stand-alone refinery operations at Lindsey. In its words, not mine,

“Due to the limitations of its scale, facilities, and capabilities, evaluations have shown that the refinery is not viable in current form.”

Although that is disappointing, it is not totally unexpected, given the long history of problems with the business. We understand that the previous owners, Total, sought to sell the refinery for several years and sold it to Prax for a nominal amount. Since Prax’s acquisition in 2021, the refinery has recorded about £75 million of losses. In addition, following a thorough assessment of offers, the official receiver confirmed that no offer was put forward that would credibly see a return to refining operations in the next few years.

Phillips 66 plans to integrate key assets into its Humber refinery operations, expanding its ability to supply fuel to UK customers from the Humber refinery. That is positive news for boosting domestic energy security, securing jobs—including hundreds of new construction jobs over the next five years—and creating future growth opportunities for renewable and traditional fuels. That being said, Ministers in the Department and I recognise that this is a very worrying time for workers, and I am glad to report that the remaining 250 directly employed workers are guaranteed employment until the end of March, although that will be cold comfort to many of them. Phillips 66 will provide further information on the number of jobs that will be retained as it moves towards completion of the sale in coming months. The Minister for Energy has asked Phillips 66 for clarity as soon as possible, and to retain as many jobs as possible. The Government will continue to support the 124 workers affected by redundancy last October.

[Richard Tice]

The bottom line is that P66 is mothballing the site, and will use certain bits of it for parts, rather than investing in its other site. Will the Minister allow a full, open and transparent look at alternative bids that would have kept the site open, and would have allowed us to keep many more jobs and to retain a strategic national asset?

[Martin McCluskey]

The hon. Gentleman will know that such discussions are commercially confidential, and the official receiver has undertaken an independent process to come to his decision.

As my hon. Friend the Member for Great Grimsby and Cleethorpes mentioned, the support for the 124 workers affected by redundancy last October includes a training guarantee to ensure that they have the skills that they need, and are supported to find long-term jobs. That goes above and beyond the usual support offered in insolvency situations. I am pleased to confirm that many —the majority—of those workers have already taken up this offer. My hon. Friend the Minister for Energy will be pleased to discuss any issues that my hon. Friend the Member for Great Grimsby and Cleethorpes thinks may emerge to do with the training guarantee.

I believe that the agreement with Phillips 66 marks the next step in securing an industrial future for the site and for the workers, who were badly let down by the former owners. The circumstances surrounding the insolvency are deeply concerning, and that is why the Energy Secretary immediately demanded that the Insolvency Service launch an investigation into the owners’ conduct and the circumstances surrounding the insolvency, which is ongoing.

Turning to issues in the broader UK oil refining sector, the UK’s refineries continue to play a vital role in maintaining reliable supplies of essential fuels that keep transport moving, industry operating and support households with their day-to-day lives. We appreciate that their contribution goes far beyond fuel alone. They are anchors for local economies, providing well-paid, skilled jobs and supporting a wide web of supply chains, which involve everything from chemicals to plastics to advanced manufacturing.

Refinery facilities also enable the production of specialist materials that many of our industries rely on. For example, the Humber refinery produces the UK’s only anode-grade petroleum coke, used in electric vehicle technology, while Fawley’s output of specialised rubber helped to ensure vaccine vials could be produced securely during the pandemic. Crucially, our refineries are also adapting for the future. They are investing in modernisation, low-carbon fuels, and technologies such as carbon capture, which are all essential to the UK’s transition to net zero. The Humber region will have a major role to play in that over the coming years. While overall fuel demand is expected to shift over time, sectors such as aviation, maritime and heavy industry will continue to depend on refined products well into the future. We want to preserve our refining sector and keep it competitive.