Sir Jim Ratcliffe’s conglomerate plans to close Scotland’s sole oil refinery due to concerns over Labour’s proposed restrictions on North Sea activities.
Grangemouth refinery, set to cease operations by 2025, threatens numerous jobs and may increase Scotland and northern England’s reliance on fuel imports.
Petroineos, a partnership between PetroChina and Sir Jim’s Ineos, intends to transform the site into a fuel import hub. This move will end crude oil processing at Grangemouth by early 2025, affecting jobs and expertise in refining.
The decision follows a warning by Petroineos chairman Andrew Gardner about Labour’s North Sea policies endangering Grangemouth. Gardner highlighted the need for natural gas supplies for refining, which he feels Labour’s policies overlook.
Petroineos communicated to employees their challenges in competing with larger, more advanced refineries globally. This announcement aligns with Labour’s strong position in polls and an approaching election.
Grangemouth, crucial to the UK’s fuel supply and infrastructure for a century, is Scotland’s only fuel refinery. Ashley Kelty, an energy analyst, noted that its closure would affect UK fuel security and possibly increase consumer costs due to imported fuel. He criticized the government’s lack of support for key sectors, misunderstanding the energy transition, and overestimating renewables’ capacity to replace traditional energy sources.
Douglas Lumsden, the Scottish Conservative Party’s shadow energy secretary, expressed concern about the potential closure of Grangemouth refinery, noting its critical impact on local and national economies. He criticized the SNP-Green government and Labour’s stance towards Scotland’s oil and gas sector, emphasizing the ongoing necessity of oil and gas, including Grangemouth refinery, in Scotland and the UK’s energy mix.
Franck Demay, CEO of Petroineos Refining, acknowledged that adapting to the energy transition and declining demand for their fuels necessitates the shift from manufacturing to importing fuel products for distribution in Scotland, northern England, and Northern Ireland, with a commitment to safe and reliable supply.
Grangemouth contributes significantly to Scotland’s GDP and manufacturing sector. Petroineos, in a communication to staff, highlighted the global competitiveness of the industry and the challenges faced by Grangemouth in competing with larger, more efficient refineries worldwide. They also noted the ongoing energy transition and decreasing demand for road fuels.
Ashley Kelty pointed out the role of the Scottish government and trade unions in creating a challenging environment for Ineos, which could have influenced this decision. Sharon Graham, Unite’s general secretary, expressed concerns over the impact on workers and broader issues regarding energy supply and security.
Derek Thomson, Unite’s Scottish secretary, emphasized ongoing engagement with Petroineos and urged involvement from the Scottish and UK governments due to the significant implications for the economy. He advocated for exploring all options to preserve the skilled jobs at Grangemouth for the long term.
