About 200 workers are to lose their jobs at BP's oil refinery in Essex.
BP said workers will be helped to find other jobs
The oil giant announced on Thursday it was closing the lubricants section of the Coryton Refinery near Corringham.
The company said the move would allow it to concentrate on producing transport fuels, particularly new clean fuels, at the Essex site.
The closure will take effect at the end of 2005 and the company said it hoped the majority of the jobs would be lost through voluntary redundancies.
Refinery manager Jeff Pitzer said there may also be a small number of compulsory redundancies.
"Where this is unavoidable we are committed to treating people fairly and providing them with assistance to find new jobs either inside or outside BP," he said.
The firm said one of the reasons for the closure was that the market for base oil is oversupplied.
The lubricants section produces about 7,000 barrels of base oil a day, which is then taken to lubricant blending plants across Europe.
The oil is turned into products for the industrial, commercial and retail sectors.
"Much of the equipment used in the lubricants facility is now coming to the end of its working life, and it would take an enormous capital investment to continue to produce these products," said Mr Pitzer.
"Concentrating solely on the production of transport fuels - particularly as we have recently completed an investment programme to increase Coryton's clean fuels capacity - will increase the profitability of the site and secure its long term future."