Britain’s richest man looks to exploit North Sea revival with ConocoPhilips deal

Britain’s richest man and dealmaker extraordinaire Jim Ratcliffe has his sights set on yet another major deal as his Ineos Group closes in on the £3bn purchase of ConocoPhillips’ (NYSE:COP) UK oil and gas fields as it seeks to capitalise on the revival in North Sea exploration.

Ineos has put down a deposit in return for three months’ exclusivity in negotiations for the US firm’s UK oil and gas assets – not including those in London or Teeside – which includes the remains of its holding in the Clair Field west of Shetland.

READ: North Sea revival continues as BP and Shell’s Shetland venture gets green light

Ineos, which is trying to frack for shale gas in south Yorkshire, is a complex group and provides products for many markets including fuels and lubricants, packaging and food, construction and pharmaceutical among many others. It also owns the Swiss football club Lausanne-Sport and the luxury jacket maker Belstaff.

The eclectic nature of the group mirrors Ratcliffe’s own diverse background and meteoric rise.

Ratcliffe’s rise

First working for Courtaulds and Exxon, Ratcliffe then had a spell in private equity as director of advanced materials with US company Advent International.

In 1992, he led his own buyout of Inspec – a BP (LON.BP.) speciality UK chemicals firm – which Ratcliffe grew by securing a number of acquisitions and then floating it on the London Stock Exchange.

Ratcliffe sold his interest in Inspec in 1998 to lead another buyout opportunity, which was to become known as Ineos and over the past two decades he has turned the group into a petrochemicals powerhouse.

The billionaire – whose £21bn fortune puts him at the top of the Sunday Times’ rich list – built Ineos from nothing by borrowing and buying assets from companies including many of the oil and gas majors.

Today, Ratcliffe wants Ineos to be the UK’s leading shale gas player but is also keen to enhance its presence in the North Sea where it has bought several assets in recent years. ConocoPhillips is looking to divest its North Sea assets in a bid to focus on US shale gas production.

Ineos already owns 11 licenses and is bidding for more after last year committing £640mln in UK shale exploration, but also pledged to put 6% of revenues gained back to local communities.

North Sea revival 

Despite hitting 65 recently Ratcliffe’s appetite for dealmaking remains undiminished, fuelled by earnings from Ineos’ buoyant US operations. Just last week Ineos agreed a US$1.1bn deal to buy a resins business from Ashland Global Holdings Inc.

Ineos already jointly owns the Grangemouth refinery and petrochemical site in the Firth of Forth and in April acquired the Forties pipeline network, which feeds directly into the plant.

The Forties pipeline network carries production from 85 fields and 40 companies.

The revival of oil and gas exploration in the North Sea is well and truly underway after energy giants BP and Royal Dutch Shell (LON:RDSA) recently received approval for a new North Sea development.

Ratclifee clearly wants a piece of the action. Last year, Ineos acquired Danish firm Dong Energy’s North Sea oil and gas business for more than $1bn and ConocoPhillips could well be next.

Story by ProactiveInvestors