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  • Is the North Sea Next for the UK's Richest Man?

Is the North Sea Next for the UK's Richest Man?

Dec 07 2018 Read 549 Times

When it comes to oil and gas the North Sea is a goldmine. Now, Britain's richest man is hoping to tighten his grip on the industry and purchase North Sea oil and gas fields from ConocoPhillips, one of America's biggest multinational energy corporations.

Jim Ratcliffe is the chairman, CEO and majority owner of INEOS, a privately-owned multinational chemicals company based in London. It currently rakes in sales a cool 4.3 billion Euros of EBITDA and with a new ConocoPhillips deal in the works, profits could be set to rise.

Tapping into an offshore goldmine

Both companies have confirmed they are in exclusive talks, specifically over a 6.5% stake in the Clair oilfield, an offshore hydrocarbon resource that harbours an estimated 7 billion barrels of oil, according to BP chief executive Bob Dudley. Early reports suggest the small stake could be worth a huge £2.3 billion.

It's not the first time INEOS has snapped up North Sea assets, with the company acquiring several offshore gas fields in 2015, then proceeding to purchase Ørsted A/S, a Denmark based energy company, for roughly £1 billion.

Ratcliffe backs Brexit divorce deal

With colossal profits on the line, Ratcliffe was quick to support Theresa May’s Brexit divorce deal in a bid to avoid “a period of pain” that could arise without a clear-cut agreement. Specifically, under World Trade Organisation rules it would see a 6.5% tariff slapped on INEOS chemicals exported from the UK to Europe. Ultimately, INEOS director of corporate affairs Tom Crotty warns the tariff could cost “several tens of millions” for the company, which could "unravel certain supply chains" and "lead to closures of plants in the UK and potentially continental Europe."

Unsurprisingly, Ratcliffe was one of the highest-profile business names to back the deal, praising it for being "sensible" and "pragmatic" and asserting that it echoes his support for free trade across the continent.

“I have made no secret of the fact that while I have long supported the concept of a Common Market within Europe, I have never felt comfortable with the concept of ever closer union,” he said. “A Brexit deal that moves us closer to an open European market has my full support.”

One of the driving forces behind ConocoPhillips' decision to sell of North Sea assets is a newfound focus on US shale. For the latest industry news don't miss 'A paradigm shift for shale: the environmental, financial, and litigative impetus for produced water recycling'.

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