Ineos founder condemns UK’s ‘irresponsible’ lack of energy policy

Ineos boss Sir Jim Ratcliffe has hit out at what he sees as the UK’s “total lack” of an energy policy, which he branded “completely irresponsible”.

The billionaire owner of the chemicals group accused the UK Government of seeking to discourage local oil and gas production and making the country reliant on supplies from overseas producers.

He made the remarks as he revealed his company’s Forties Pipeline System (FPS) has seen North Sea oil flows drop by 40% over the last six years.

The FPS moves 40% of the UK’s oil from the North Sea through to Grangemouth, where it is processed for distribution throughout the UK.

Ineos has been forced to close a third of the system’s processing capacity as a result of the recent reduction in oil flow, Sir Jim said, potentially threatening hundreds of jobs that depend on it.

He blamed the decline on a combination of windfall taxes and “negative signals” he claims politicians have been making about the future of the North Sea in recent times.

Sir Jim argued the “worrying” decline puts UK consumers “at the mercy” of foreign producers and is causing huge volatility in energy prices, pushing ever increasing numbers of people into fuel poverty.

Expanding on his themes, he said the main reason for the recent decline was a lack of investment in new oil and gas fields caused by companies having less cash after paying new windfall taxes.

Sir Jim said the problem was made worse by “mixed messages” coming from UK politicians, which he said further undermine companies’ willingness to invest in the North Sea.

He said: “The UK’s total lack of an energy policy is completely irresponsible.

“Whilst the rest of the world is encouraging local oil and gas production, the UK seems intent on destroying it through high taxes and disincentives, making us totally reliant on overseas supplies and losing billions in potential revenue.

General view of Grangemouth oil refinery
The Ineos refinery in Grangemouth (PA)

“The rest of the world has understood that we will need oil and gas for the next 30 years and is incentivising production through sensible taxation.

“The UK is doing the opposite and seems intent on rapidly destroying North Sea production through a mixture of negative comments and punitive windfall taxes.”

Sir Jim made his remarks on the day it emerged the North Sea Transition Authority had granted production and development consent for the Rosebank oil field north-west of Shetland.

The field is believed to contain up to 350 million barrels of oil and is currently thought to be one of the largest untapped finds in UK waters.

Energy Security Secretary Claire Coutinho said: “The jobs and billions of pounds this is worth to our economy will enable us to have greater energy independence, making us more secure against tyrants like (Russian President Vladimir) Putin.

“We will continue to back the UK’s oil and gas industry to underpin our energy security, grow our economy and help us deliver the transition to cheaper, cleaner energy.”