Jim Ratcliffe, the billionaire owner of chemicals conglomerate Ineos, will bid for Shell’s Buzzard oilfield in the North Sea valued at around US$2.2 billion (GBP 1.8 billion). The sale is part of Shell’s debt reduction plans, following its multibillion acquisition of gas major BG Group earlier this year. Total proceeds from asset sales are seen at up to US$30 billion (GBP 24.6 billion).
For Ratcliffe, if his bid wins, the deal would represent a much sought-after expansion into the energy industry of the country. His bid for Buzzard is the latest in the North Sea, after last year, Ineos acquired all the gas fields operated by German DEA Group in the U.K. North Sea shelf. The Buzzard field became property of Shell after the acquisition of BG Group. Ineos is also the owner of the only oil refinery in Scotland.
Shell invited companies to bid on the field in late September, and Ineos was among the parties identified as potential suitors, along with Siccar Point Energy – a company funded by Blackstone Group – and Chrysaor Holdings, an energy explorer that has teamed up with another private equity firm – EIG Global Energy Partners.
Shell’s divestment plans are for the period until 2018, with deals worth US$6-8 billion eyed this year alone, according to the company’s chief financial officer Simon Henry. Apparently, a hefty part of this will come from North Sea asset sales, as Shell joins other energy companies in exiting the area, which features mature fields and high production costs: an unappealing combination in the current market environment.
Earlier this year there was media speculation that Shell will exit the North Sea entirely, but the company has denied the reports. At the moment, it operates 33 platforms there, with stakes in 65 oil and gas fields.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.