Bil­lion­aire bids for BP’s North Sea oil pipe­line

Daily Mail - - City & Finance - by Hugo Dun­can

A BIL­LION­AIRE chem­i­cals ty­coon is plan­ning to buy one of Bri­tain’s most im­por­tant oil pipelines – putting the fu­ture of hun­dreds of jobs in doubt.

Lead­ing in­dus­tri­al­ist Jim Rat­cliffe, founder and chair­man of petro­chem­i­cals gi­ant Ineos, is in talks with oil su­per­ma­jor BP over the pur­chase of the For­ties Pipe­line Sys­tem.

The sys­tem – known as FPS and a cru­cial part of the oil in­fra­struc­ture in the UK North Sea – is wholly owned by BP and can bring ashore 1m bar­rels of crude a day from more than 50 off­shore fields.

But de­clin­ing out­put means it is run­ning well be­low ca­pac­ity and BP is look­ing for a buyer as it seeks to bol­ster its fi­nances fol­low­ing the col­lapse of the oil price in the last three years.

BP and Ineos last night con­firmed to the Mail that they are in dis­cus­sions over a pos­si­ble deal.

Ineos, set up by Rat­cliffe in 1998, reg­is­tered a new com­pany called Ineos FPS only last week.

But the prospect of a sale will fuel fears over the fu­ture of 300 BP staff who cur­rently op­er­ate and sup­port the business.

It marks yet more un­cer­tainty for the North Sea oil and gas in­dus­try fol­low­ing the loss of over 120,000 jobs since 2014 as the price of crude sank from around $115 a bar­rel to $50.

The pro­posed deal could also spark a fresh row be­tween Rat­cliffe, 64, and the unions fol­low­ing his stand- off with work­ers in 2013 that al­most saw him shut his Grange­mouth power plant in Scot­land.

The clash saw Rat­cliffe dubbed ‘Dr No’ by the Unite union be­cause of his stub­born re­fusal to com­pro­mise over work­ers’ pen­sions.

Manch­ester-born Rat­cliffe, a mar­ried fa­ther- of- three who re­cently an­nounced plans to build a new 4x4 ve­hi­cle based on the now de­funct Land Rover De­fender, has also been nick­named ‘JR’ after the Dal­las oil ty­coon and is said to be worth £3.2bn.

The FPS was orig­i­nally built in the 1970s to trans­port oil from the For­ties field in the North Sea to the Grange­mouth re­fin­ery near Ed­in­burgh.

BP sold the For­ties field to Apache in 2003 and the Grange­mouth plant to Ineos in 2005 but it held on to con­trol of the pipe­line sys­tem.

The FPS cur­rently car­ries around 450,000 bar­rels of oil a day – or 40pc of UK pro­duc­tion – from the North Sea to the on­shore ter­mi­nal at Cru­den Bay, north of Aberdeen.

From there, the sys­tem trans­ports the oil around 130 miles south via an on­shore pipe­line to the Kin­neil ter­mi­nal, ad­ja­cent to the Grange­mouth re­fin­ery and chem­i­cal plant.

The oil is pro­cessed and sta­bilised at Kin­neil and then ei­ther ex­ported or sold to Grange­mouth. The oil that flows through the sys­tem is crit­i­cal in set­ting the price of the Brent crude in­ter­na­tional bench­mark.

BP has been try­ing to sell the FPS for some time and pre­vi­ous talks with Ineos are un­der­stood to have col­lapsed amid dis­agree­ments over how to price the as­set.

A BP spokesper­son said: ‘BP can con­firm it is in dis­cus­sions with Ineos re­gard­ing a po­ten­tial sale of the For­ties Pipe­line Sys­tem. We re­main com­mit­ted to com­mu­ni­cat­ing openly with staff and our stake­hold­ers as soon as we are able, and as com­mer­cial con­fi­den­tial­i­ties al­low, if any deal is con­firmed or agreed.’

A spokesman for Ineos, which em­ploys 4,000 staff in the UK, said: ‘We can con­firm we are cur­rently in dis­cus­sions with BP re­gard­ing the po­ten­tial pur­chase of the For­ties Pipe­line Sys­tem. At the mo­ment the con­ver­sa­tions are con­fi­den­tial and the con­ver­sa­tions are on­go­ing.’

As well as its Grange­mouth plant, Ineos has sites in Hamp­shire, County Durham, Cheshire, Hull and Mid­dles­brough.

Rags-to-riches Rat­cliffe moved the firm’s head­quar­ters back to the UK last year, six years after he fell out with for­mer Prime Min­is­ter Gor­don Brown and re­lo­cated to Switzer­land.

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