Ineos buys North Sea gas fields

Swiss chemicals company Ineos has bought all the UK North Sea gas fields owned by the DEA Group, which is in turn owned by Russian billionaire Mikhail Fridman’s investment fund LetterOne, the companies said on Sunday.

LetterOne had previously bought the North Sea assets from RWE for $5.8bn as part of acquisition of DEA.

Under the terms of the agreement, Ineos Upstream, a new oil and gas subsidiary of Ineos, will acquire gas fields, including the Breagh and Clipper South fields, in the Southern North Sea.

Ineos operates Scotland’s largest manufacturing complex at the Grangemouth refinery and petrochemical plant, the destination of a pipeline from North Sea fields.

Together, they provide as much as 8pc of all gas in the UK.

The government cited potential western sanctions against Russian Federation and the consequent adverse impact on the fields’ operation due to that country’s involvement in the unrest in Ukraine.

This is its first move into owning oil and gas assets. “This will also help our British petrochemical assets to have permanent access to competitive energy sources”, says Ineos in official statement.

There are indications its chairman and controlling shareholder Jim Ratcliffe intends to buy more.

In addition to investing $1bn to bring US Shale gas to the United Kingdom and to Norway, Ineos is assessing additional opportunities in the offshore area.

Ratcliffe said the North Sea acquisition is a great entry point for the Ineos Upstream business and “they are high quality, low risk assets” and the company will continue to evaluate other opportunities in the North Sea. North Sea oil and gas can make a significant contribution to providing these feedstocks as well as servicing our energy needs, ” Ineos Upstream chairman Rob Nevin said.

The multinational has also invested heavily in the shipping, docking and processing sectors to bring fracked gas from the U.S. to Grangemouth and to a Norwegian processing site as part of a £360m project.