Jim Ratcliffe warns Britain’s energy policy is ‘all over the place’ as Ineos explores North America with Shell
Europe and the UK’s approach to energy policy is “all over the place” and eroding the region’s security and growth prospects, Jim Ratcliffe has said in an announcement confirming Ineos’s plans to expand its oil and gas operations in the Gulf of Mexico.
In a statement announcing Ineos’s fresh investment in the US alongside Shell, the billionaire chemicals tycoon blasted Britain and the EU for neglecting their energy and industrial sectors, saying both were crucial for a vibrant economy.
“Growth in an economy is highly correlated to competitive energy prices, and it’s a huge issue for national security,” Ratcliffe said. “If you can’t get energy, then you can’t run your hospitals, run industry or heat your houses.”
Ineos announced on Tuesday it had taken a 21 per cent stake in three oil and gas sites off the east coast of America as part of a wider push into the world’s largest economy. Ineos did not disclose how much it bought the stake for.
The chemicals juggernaut, which also boasts a large oil and gas division, has now committed over $3bn to its US operations as it seeks to diversify away from upstream operations in Europe and the UK.
Jim Ratcliffe, who also owns Manchester United, has repeatedly hit out at British and EU policymakers’ decision-making for throttling Ineos’s growth, blaming the continent’s sky high energy costs and excess regulation for its latest push into the US.
Jim Ratcliffe hails ‘stable investment environment’ in America
The stinging broadside comes despite the government injecting £105m into Ineos’s Grangemouth plant as recently as December, after the tycoon warned what is the UK’s last ethylene plant faced closure without state support. The investment saved hundreds of jobs, ministers said at the time, and Ratcliffe hailed it as a sign of the UK government’s “commitment to British manufacturing”.
The deal announced on Tuesday means Ineos’s energy division will now work with Shell to seek out untapped oil and gas reserves in the shelf, which is located 80 miles off the Louisiana coast. The group will chiefly help the Anglo-Dutch energy major to develop the Fort Sumter discovery, which is estimated to contain over 125m barrels of oil equivalent. But it will also launch more exploration projects in the area before 2030, Ineos Energy said.
“Europe is all over the place,” Ratcliffe added. “From an investment point of view, you always go to the stable rather than the unstable. I would have a lot more confidence in investments in America in the energy sector than I would in Europe.”
Jim Ratcliffe’s wider Ineos business is currently locked in a battle to bear down on its enormous debt pile, which at the end of last year topped $18bn – 13.5 times more than its annual earnings. Credit ratings agency Moody’s has downgraded the group’s debt twice since September, saying the company’s operating performance has suffered from “continued and greater than expected deterioration”.
Billionaire Ratcliffe is currently overseeing in a major disposal programme in a bid to shore up the company’s balance sheet. He is reportedly nearing a sale of Ligue 1 football team Nice, while his co-founder Andy Currie is has reportedly put his 271ft yacht on the market for €85m.
A spokesman for the government told The Times: “The UK has one of the most robust fiscal frameworks in the world, which helps maintain economic stability while unlocking £120 billion of investment in our future infrastructure with disciplined day-to-day spending.
“As a result, borrowing has fallen by £20 billion, debt is on a downward path, and the UK’s economic resilience is stronger.”