INEOS set to buy North Sea gas fields

INEOS has agreed to buy all of the UK North Sea gas fields owned by the German-based oil and gas firm DEA Group, it was announced yesterday (Sunday, October 11).
INEOS Upstream – a new oil and gas subsidiary of INEOS AG – will acquire a strong portfolio of natural gas assets, including the Breagh and Clipper South fields in the Southern North Sea which are positioned close to INEOS’ sites in Scotland and the North East, from the UK subsidiary of DEA Deutsche Erdoel AG, which is part of the LetterOne Group.
The annual production from these fields is thought to account for 8% of the UK’s annual gas production – generating enough gas to warm one in 10 British homes.
Although INEOS is a new entrant to the North Sea, the company says it has extensive experience in operating chemical plants of similar complexity to these offshore platforms.
As one of the world’s largest operators of chemical plants and a huge consumer of hydrocarbons these assets should make a significant contribution to INEOS’s European energy and feedstock strategy, according to the firm.
The company operates Scotland’s largest manufacturing complex at Grangemouth which is the only refining and petrochemicals complex directly attached to the North Sea.
INEOS has recently announced its intention to be the leading UK player in onshore gas development and, as part of the company’s growing interest in energy production, says it’s now evaluating additional opportunities in the offshore area.
As part of the company’s ongoing business planning, it has set up INEOS Upstream, a new oil and gas subsidiary of INEOS AG and says it’s working with a number of top class North Sea oil and gas professionals. Their first task has been to conduct a strategic review of the potential opportunities in the North Sea to see whether these are suitable to play a part in the development of the INEOS Upstream business.
Rob Nevin, chairman INEOS Upstream, said: “INEOS and its JV partners are huge consumers of natural gas, ethane, propane and condensates. North Sea oil and gas can make a significant contribution to providing these feedstocks as well as servicing our energy needs.”
INEOS also owns a number of Shale gas licences in England and Scotland and is investing a further $1 billion in an ambitious project to bring US Shale gas to the UK and to Norway.
Jim Ratcliffe, INEOS chairman, added: “The acquisition of these North Sea gas fields is a great entry point for the INEOS Upstream business. They are high quality, low risk assets and they come with a highly experienced management team. Whilst no decisions have yet been made, we will continue to evaluate other opportunities in the North Sea”.
The transaction is subject to competition clearance from the European Commission.
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