Yousaf warns of ‘quite significant’ job cuts as oil refinery to cease operations

Petroineos said the Grangemouth plant will become a fuel import terminal.

Pa Scotland Reporters
Wednesday 22 November 2023 15:50 GMT
The plant at Grangemouth will become a fuel import site (Andrew Milligan/PA)
The plant at Grangemouth will become a fuel import site (Andrew Milligan/PA)

The scale of job losses at Scotland’s only oil refinery could be “quite significant”, the country’s First Minister has said, as its owners announced it will cease operations in 2025.

Petroineos, which owns the plant at Grangemouth, said it will become a fuel import terminal.

The company said in a statement: “The timescale for any operational change has not yet been determined but the work will take around 18 months to complete and the refinery is therefore expected to continue operating until spring 2025.”

The firm said the site “faces significant challenges due to global market pressures and the energy transition”.

Questioned on the extent of potential job losses at the site, First Minister Humza Yousaf told the PA news agency: “We’ve seen that they could be quite significant and that’s why the Scottish Government is very prepared to work with the owners of Grangemouth and, of course, with the trade unions in order to try to ensure a sustainable future for Grangemouth.

There is a cost to the hostility of Labour, SNP and the Greens to any hydrocarbon production in the North Sea, and one price is the closure of Scotland’s most significant industrial plant

Alex Salmond

“This will be a very worrying time for the workers that are impacted by this.”

Asked if his Government bears some responsibility for the situation, he said oil and gas licensing decisions are made by the UK Government, but stressed the importance of a “just transition” and “taking the workers with us on the journey towards a sustainable future”.

Questioned if he believes all those who lose their jobs at Grangemouth will be able to find employment in the green energy sector, he replied: “We’re at very early stages. We’ve just heard the announcement of what could potentially happen in the future.

“The job of government now is to work closely with the owners, with trade unions, to ensure a sustainable future for our country.”

Despite criticism of the decision by unions and opposition politicians, Scottish Wellbeing Economy Secretary Neil Gray said he believes the move aims to prepare the site for the future.

“This is a commercial decision and it is our understanding that these works will future-proof the site to allow it to continue as an important fuel supply source for years to come,” he said.

Asked in Holyrood when he learned of the decision, Mr Gray said he had been told on Monday evening.

Franck Demay, chief executive at Petroineos Refining, said: “This does not change anything for our operation today, where it is business-as-usual at the Grangemouth refinery.

“We currently anticipate continuing refinery operations until spring 2025.

“This is the start of a journey to transform our operation from one that manufactures fuel products into a business that imports finished fuel products for onward distribution to customers.

“Throughout this process, our focus will remain on the safe production and reliable supply of high-quality fuels to our customers in Scotland, the north of England and Northern Ireland.

“As we start to make this investment in preparing for a future transformation, we are equally committed to a regular programme of engagement with our colleagues about the changes we are making to our business.”

The announcement drew the ire of trade unions, with Derek Thomson, the Scottish secretary at Unite, saying: “Every option must be on the table in order to secure the hundreds of highly-skilled jobs based at the Grangemouth complex for the long-term.”

The GMB said the announcement should act as a “huge wake-up call” to politicians across the UK.

General secretary Gary Smith said: “This is a deeply worrying time for the future of the workers and communities dependent on Grangemouth.

“Time and again, GMB has said the UK needs a plan and not bans for better energy independence and prosperity.

“Today’s announcement should be a huge wake-up call to policymakers across the political spectrum.”

Scottish Conservative net-zero spokesman Douglas Lumsden said the “hostile attitude” shown by the Scottish Government and the UK Labour Party towards oil and gas “will have been a factor” in the decision, although it is unclear if this is the case.

“They all fail to recognise the need for oil and gas – such as the refinery at Grangemouth – to be part of Scotland and the UK’s energy mix for years to come,” he said.

“Instead, the highly-skilled workforce at Grangemouth have been delivered the worst possible news at a difficult time. The SNP-Green government must act now.”

Former first minister Alex Salmond said: “There is a cost to the hostility of Labour, SNP and the Greens to any hydrocarbon production in the North Sea, and one price is the closure of Scotland’s most significant industrial plant and the loss of thousands of highly-paid jobs directly and through the supply chain.”

Scottish Labour MSP Paul O’Kane – asking a question of Mr Gray in Holyrood in the hours after the decision – described the move as “deeply, deeply concerning and a huge blow to those communities”.

Scottish Green MSP Gillian Mackay called for an “urgent summit” on the issue, saying: “This is an appalling way to treat workers who only months ago were being promised that they would be part of a just transition for the site. Instead they are being told their jobs are at risk just weeks before Christmas.”

Scottish Liberal Democrat economy spokesman Willie Rennie said it was a “dark day” for Grangemouth, adding: “If the ‘just transition’ is to be more than just a slogan, it must deliver a future for the workers and for the Grangemouth site.

“The Scottish and UK governments must step up now.”

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