Ineos fails31 Jan 2019 19:21
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Accessibility helpSkip to navigationSkip to contentSkip to footer Sign In Subscribe Financial Times MYFT Financial Times Sign In fastFT Ineos Group Ltd Add to myFT Ineos fails to reach deal with ConocoPhillips on North Sea assets Energy and chemicals group to lose ‘substantial’ deposit after talks fall through Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share on Whatsapp (opens new window) Save Save to myFT Nathalie Thomas in Edinburgh and David Sheppard in London 3 HOURS AGO Ineos, the privately owned energy and chemicals group run by multi-billionaire Jim Ratcliffe, has failed to reach a deal with ConocoPhillips over acquiring the US oil major’s assets in the North Sea, despite several months of exclusive talks. ConocoPhillips confirmed the breakdown of negotiations in a memo to staff on Thursday and said it would now engage with other potential bidders. These are expected to include Chrysaor, the private equity-backed energy company that became a leading North Sea producer after acquiring $3.8bn worth of assets in the region from Royal Dutch Shell in 2017. “The period of exclusive negotiations with Ineos has concluded and we will now continue the marketing process with a number of additional parties expressing interest in our UK assets,” the memo read. Ineos also confirmed the talks had come to an end. Ineos will forfeit a “substantial” deposit paid to keep the talks exclusive. It had paid the retainer — a practice that remains fairly unusual in the energy industry — fearing considerable competition from other potential bidders, including newer private equity-backed players that have build up a strong presence in the region in just a few years. However, after news of the exclusive talks broke in November, oil prices took a turn for the worst, which would have made valuing the assets difficult in such a volatile environment. Brent crude oil fell from $86 a barrel in early October to below $50 a barrel between Christmas and New Year. While it has rallied back to $62 a barrel since then, most analysts are cautious about the potential for significant further gains given the growth in supplies from the US shale sector. Wood Mackenzie, the oil and gas consultancy, estimates that up to $8.8bn worth of assets may exchange hands in the North Sea as oil majors scale back their operations in the region and sell to newer companies, which believe they can squeeze more life out of mature fields or have greater appetite to dev
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