Ineos is negotiating to acquire ConocoPhillips North Sea assets

On November 19th, Ineos, a chemical and energy group, was negotiating exclusively to acquire North Sea assets of ConocoPhillips, an upstream U.S. company, in an effort to expand the British company's natural gas-focused portfolio. ConocoPhillips said in a statement Monday that it was conducting "exclusive negotiations" with Ineos on its British assets, excluding Teesside Oil Terminal and the London-based trading organization, which confirmed the talks.

Ineos owns the Fortis Crude Oil Pipeline and, together with the state-owned company PetroChina and Grangemouth Refinery in Scotland, has been making large upstream acquisitions. Ineos bought all Russian DEA assets in the UK in 2015 and Danish DONG Energy's business in the North Sea last year. ConocoPhillips produced 67,000 barrels of oil per day in the third quarter, of which 40% was liquefied natural gas and 60% was natural gas. The portfolio will be boosted as BP's Claire Reconstruction Project, which has been severely delayed but will be put into operation by the end of the year, begins production. After the swap deal with BP, ConocoPhillips will hold a 7.5% stake in Claire, which will increase the former's stake in Alaska as part of the consolidation of the U.S. company after the oil price plunge.

Successful acquisition will highlight the commitment of the British owner Jim Ratcliffe to North Sea natural gas and related chemicals production, especially in the UK. Englishman has also been vying unsuccessfully with Scottish authorities for the right to develop shale gas.

Ineos'current UK portfolio includes relatively low-cost products produced in the shallow waters of the southern North China Sea acquired from DEA, and deep-sea products produced in the Daudal-operated Lagon-Tormore oilfield in Western Shetland. Laggan-Tormore was put into operation in 2016 and met nearly 10% of the UK's natural gas demand, so when Total announced the discovery of important Grandona gas in the area in September, the oil field's prospects were further enhanced. Ineos owns 20% of Laggan-Tormore Oilfield.

In January, Ineos set the total upstream production of Denmark, Norway and the United Kingdom at 95,000 barrels of oil equivalent per day.