Billionaire bids for BP’s North Sea oil pipeline
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.