Sir Jim Ratcliffe has halted investment in Britain’s energy sector because of unpredictability over the tax regime.
After shutting its Grangemouth oil refinery in Scotland the company will switch its business to the United States.
Brian Gilvary, executive chairman of Ineos Energy, told The Telegraph that this will see £3 billion of investment lost to Britain in favour of the US.
“We have stopped investing in Britain. Our future investment will not be [in] the UK. There’s no question of that,” he said.
“The problem is that the UK has become one of the most unstable fiscal regimes in the world from a perspective of natural resources and energy. It means we cannot invest with any certainty because we can’t be sure what future tax rates will be.”
He said Ineos would prefer to invest in the US as a market that “absolutely understands the importance of domestic supplies and how you can drive economic growth off the back of it”.
Despite rising revenue last year, Ineos Group Holdings said higher finance costs meant it swung from a profit before tax of €407.8 million to a loss of €71.1m and it cut its dividend.
The controversial closure of the Grangemouth refinery, run as a joint venture with PetroChina, led to the loss of 430 jobs.
Sir Jim has stated that high carbon taxes merely create additional costs that achieve “nothing for the environment” because they “merely shift production and emissions elsewhere”.
Mr Gilvary added: “For us the future lies in other countries, mostly the United States.
“The United States has got a long track record. In the 1990s, it was producing 6.5 million barrels of oil a day and importing five million, but now it’s producing 30 million barrels a day and exporting. That’s proper energy security and a proper fiscal regime.”
David Whitehouse, CEO of Offshore Energies UK, said Sir Jim’s comments should prompt an immediate review of the energy profits levy, or windfall tax on oil and gas company profits.
“There is no time to lose – jobs are being lost today. The offer from industry is clear – reform this tax now to protect UK jobs, investment and the economy. The North Sea has been the powerhouse of the UK’s industrial success and prosperity and with the right fiscal and economic policies it can be the platform for an era of economic success.”
Ineos has been investing in the US with the purchase of oil and gas operations in the Gulf of Mexico from the China National Offshore Oil Corporation for an undisclosed sum.
The group also acquired an oxide business in the US from LyondellBasell Industries, an American chemicals group, for $700 million in 2024.
It has invested in an ethanol plant in Belgium which the Conservative government in the UK supported with a loan guarantee.
Last week Juergen Maier, chief executive of Labour’s green investment vehicle GB Energy, said he had become an “all-energy advocate” as he believed the transition should accommodate the oil and gas sector.
He warned that the northeast of Scotland was “haemorrhaging workers too fast” and the tone of the SPE Offshore Europe conference last week suggested all parts of the energy industry wanted to work together to ensure the transition would not abandon oil and gas workers.
As a parting shot ahead of last week’s Cabinet reshuffle, outgoing Foreign Secretary, David Lammy and Scottish Secretary Ian Murray were behind a visit to Edinburgh by Nik Mehta, the High Commissioner to Singapore, to discuss a number of opportunities. These include potential investment in Grangemouth.
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