Grangemouth, Scotland’s only oil refinery, is to close in 2025 with the loss of 400 jobs, operator Petroineos said, according to a report by Reuters.
Daily Trust reports that this is coming amidst the rollout of premium motor spirit (PMS) from the Dangote refinery, which significantly reduced importation of PMS.
Reuters quoted Petroineos as saying it was preparing to shut Grangemouth, Britain’s oldest refinery as production ceases in the second quarter of next year, subject to an employee consultation, a company spokesperson said.
The decision was however criticised by trade unions and politicians.
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“It is deeply disappointing that Petroineos have confirmed their previous decision to close Grangemouth oil refinery,” UK Energy Secretary Ed Miliband said.
Reuters further reports that the site will become an import and distribution terminal for finished fuels, which will cut the number of employees at the site from 475 to around 75 over the next two years.
Petroineos is a joint venture between PetroChina International London (PCIL) and INEOS Group, a British chemicals firm founded by billionaire Sir Jim Ratcliffe.
The company cited economic difficulties as the reason for the closure, stating that the company had invested $1.2 billion since 2011, and returned losses in excess of $775 million over the same period.
“Grangemouth is increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa. Due to its size and configuration, Grangemouth incurs high levels of capital expenditure each year just to maintain its licence to operate,” the company said.
It said the plant is currently losing around $500,000 per day, and expects to see a $200 million loss for 2024.
Analysts have said the commencement of operation by the Dangote refinery would significantly reduce fuel importation, thereby affecting the businesses of many refineries outside Africa.
The refinery operation is a business that thrives on volume and analysts anticipate closure of more refineries in Europe if more African countries invest in domestic refining.
The federal government of Nigeria is also working on reviving its refineries in Port Harcourt, Kaduna and Warri.
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