Ineos in £1bn deal to boost North Sea oil & gas interests

● Deal with Denmark’s Dong propels chemicals firm into top ten in the region

giant Ineos has underlined its ambition to become one of the top players in the North Sea after agreeing a deal worth up to $1.3 billion (£1bn) to buy Danish group Dong Energy’s oil and gas business.

The addition of production, development and exploration sites in the west of Shetland and off the coasts of Denmark and Norway, will make Ineos the biggest private operator in the North Sea and catapults it into the top ten oil and gas companies in the region.

The firm, which also owns the UK’S largest shale gas site portfolio following a deal in March, signalled that other oil and gas deals were likely and that it was in discussions that may lead to further transactions. Around 440 staff will also transfer from Dong on completion of the deal, which is expected in the third quarter.

Billionaire Ratcliffe, chairting man of Ineos, which employs 1,300 people at its Grangemouth petrochemicals site, said the business was a “natural fit” for the group as it expands its upstream arm.

He added: “This business is very important to us at this stage of our growth plans and we are delighted with the expertise that comes with it.”

The Dong business has stakes in two producing gas fields in the west of Shetland area, Laggan and Tormore, along with two gas fields that are currently being developed, Edradour and Glenlivet. The vast majority of the production under the deal comes from the large Norwegian gas field Ormen Lange, in which Dong holds a 14 per cent interest.

Under the deal Ineos has agreed to pay $1.05bn and up to a further $250m over the next three years.

Henrik Poulsen, chief executive of Dong, said: “Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getchemicals a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business.

“With the agreement with Ineos we’ve obtained just that.”

The Dong acquisition, which isexpectedtocompletewithin the third quarter of this year subject to regulatory approvals, comes after Ineos recently snapped up the 235-mile Forties pipeline from BP, which transports nearly 40 per cent of the UK North Sea’s oil and gas production, for up to $250m.

In March Ineos also acquired all of Engie’s shale gas interests in the UK for an undisclosed amount. Ineos’ total UK portfolio under licence is now more than 1.2 million acres but public opposition to fracking and regulatory hurdles means the industry has been slow to take off so far.

Lastmonthineosannounced it intends to launch a 3D seismic survey across parts of Nottinghamshire where it owns licences.

Ineos now employs around 18,500 people across 105 sites in 22 countries with sales of $40bn a year.