Grangemouth: Oil and gas ban will devastate jobs, union says

The warning comes after the closure of Scotland's only remaining oil refinery was confirmed for the second quarter of 2025, with around 400 jobs at risk.

Petroineos, the joint venture between INEOS and PetroChina, said the 100-year-old site would close after it estimated last week's losses were around $500,000 - £381,000 - per day.

First Minister John Swinney met Grangemouth workers on Friday and said he had urged the refinery's owners to reconsider the "premature" closure.

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A £100 million joint support package from the UK and Scottish Government was welcomed, but Ms Gilmour warned it had come "far too late".

In the heavily critical letter seen by The Herald, she warned the predicted 400 job losses were under calculated.

"The number of job losses are higher than those being reported," she said. "The 400 jobs are just those directly employed onsite."

"To be clear, the closure of the refinery represents a failure of both governments to protect energy jobs."

Many workers were in sub-contracted services including plating and welding, the union said.

Mr Miliband has been warned to ditch the plans to ban new oil and gas licences in the North Sea, while Scottish ministers have been told their 2023 presumption against new licences would be damaging.

Scottish ministers have said new explorations will only be approved if they meet certain climate and energy compatibility tests.

"Job losses at Grangemouth are the tip of the iceberg in what is to come next if both governments do not reverse attacks on oil and gas.

"There are no green jobs for our members to step into. A cliff edge for oil and gas production will be devastating for the workforce, our energy security and tax base."

Ms Gilmour added: "The green jobs our members have been promised are nowhere to be seen and our traditional sectors like oil and gas are in a terminal decline.

"This will continue unless a new approach to oil and gas is not taken, backed up public investment.

First Minister John Swinney. (Image: PA/Andrew Milligan)

"The Grangemouth refinery is old. However this is true of much of Scotland's manufacturing sites. As time goes on they will only deteriorate further without an industrial plan of targeted investment in the sites of creating the green jobs of the future."

She also hit out at the "rhetoric" of both the UK and Scottish Government, adding the blame cannot solely lie with the previous Conservative administration.

"Any business in oil and gas who listens to the rhetoric from both current governments and understands the impact of their decisions would not risk investing in the sector - a sector which provides hundreds of thousands of jobs and billions in taxes each year," Ms Gilmour said.

Mr Swinney met with Grangemouth workers at Forth Valley College in Falkirk on Friday, where he told journalists he had asked Petroineos to "reconsider" the closure.

"We've made the point that we thought this was premature, the UK Government has talked to them, but we were told yesterday morning this is what was going to be happening," he said.

“I think the decision is premature and I would encourage Petroineos to consider what options there are to prolong the life of the refinery.”

Union representatives were also present at the meeting, with Derek Thomson of Unite warning workers expressed "palpable anger and betrayal".

A Liverpool-based competitor - Stanlow oil refinery - confirmed earlier this year it was preparing to sell more fuel when the rival Scottish firm closes its doors.

However, mystery of the plant’s future remains after Falkirk East MSP Michelle Thomson said she had found a potential buyer for the facility.

A non-disclosure agreement has been signed, she said, limiting what she can say, but she said the refinery could be saved in its entirety, with a “serious” international buyer considering a move.

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Petroineos Refining chief executive officer Frank Demay said the plant’s future currently looks like an import terminal, with “significant fewer” staff required to operate it.

He added: “The energy transition is happening now and it is happening here.

"Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further.

"That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business."

He said only around one fifth of the current refinery workforce could be retained, with redundancy discussions set to take place with unions and employees.

It is thought up to 280 workers could go in the three months following the closure while another 100 would be retained for up to a year to begin decommissioning work. 

Mr Miliband said the closure was “deeply disappointing”, adding: “We stand with the workforce in these difficult times, that is why we are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and service a viable industrial future for the Grangemouth site.”

Gillian Martin, acting net zero and energy secretary for the Scottish government, said: "My immediate thoughts are with the workforce. This is a very challenging time for them and their families, and we will support every worker affected by this decision. 

“We are working very closely with the UK Government and together we have communicated our disappointment to Petroineos today.

“The Scottish Government has consistently made clear our preference was for refining to continue as long as possible, and we have continued to press the shareholders for a positive decision until the 11th hour."