© Supplied by TotalEnergies 
Employees and contractors working at the Shetland gas plant and on Greater Laggan Area fields will be breathing sighs of relief after it emerged a deal to sell assets to Prax Group have not yet completed.
Although the deal to sell TotalEnergies’ West of Shetland assets to the Prax was announced in June 2024, the French energy giant said it remains as operator.
The confirmation comes after it emerged a number of the Prax Group’s assets and subsidiaries collapsed into insolvency, including the Lindsey oil refinery on the Humber.
Eyes were raised when Prax, owned by husband and wife team Sanjeev and Arani Kumar Soosaipillai, made a first step into the North Sea when it snapped up listed West of Shetland E&P firm Hurricane Energy for £250 million in 2023.
© Supplied by DCTPrior to this the group had made a big move into the midstream market with, buying the Lindsay oil refinery from TotalEnergies in 2021.
Established in 1999, the family business also operates around 200 petrol stations and employs over 1,000 workers across the UK.
On Monday, drama enfolded hundreds of workers at the oil refinery in North Lincolnshire as it emerged it was handed to the Official Receiver for liquidation, while Prax parent company State Oil Group also fell into administration.
However, Prax’s upstream business, including Hurricane is not insolvent and administrators Teneo will likely seek new buyers.
TotalEnergies might also try to find new owners for the West of Shetland operations.
What went wrong?
SP Angel analysts David Mirzai said the woes affecting Prax represented “more bad news for the UK oil and gas sector”.
He said Prax, “a relatively new entrant”, had failed “ostensibly down to over-leveraging itself, putting hundreds of jobs at risk at one of the UK’s five remaining oil refiners”.
© Supplied by Prax GroupHe added: “As with the recent Grangemouth closure, early indications point to the sky-high cost of energy to industry in the UK as being a significant factor in pushing manufacturers in energy-intensive industries such as refining out of business.”
He said Prax had built its upstream division by taking advantage of a “limited credible buyer universe and numerous large companies looking to exit their UK positions”.
But he does not expect administrators will struggle to find new buyers: “We expect Prax’s UK production base remains profitable and cash flow positive and will likely generate significant interest in the M&A market, where recent transactions have targeted fiscal and operational synergies.”
In a statement, TotalEnergies said: “The transaction to sell our West of Shetland asset to Prax has not yet completed and as such we remain the operator of the Shetland Gas Plant and related fields.
“As has always been the case, our focus is on the safety and wellbeing of everyone working at and in support of our operations in Shetland.”
