Chinese owner of Grangemouth oil refinery decides to exit his joint venture with billionaire Jim Ratcliffe

According to The Mail on Sunday, the Chinese owner of the massive Grangemouth oil refinery in Scotland may leave his joint venture with billionaire Jim Ratcliffe after more than a decade.

PetroChina, Beijing’s largest oil and gas producer, is reportedly considering selling its investment in Petroineos, an oil trading and refining business co-owned by Ratcliffe’s Ineos, according to city sources.

PetroChina merged with Ineos to become Petroineos in 2011, which controls Grangemouth and the Lavera refinery in France.

Petroineos has a trading revenue of more than $30 billion (£23 billion) and two refineries that process over 420,000 barrels of crude oil per day.

The agreement was signed in the presence of then-Deputy Prime Minister Nick Clegg and his Chinese counterpart, Li Keqiang.

The company had 1,000 employees and a $15 billion turnover at the time. PetroChina, according to a City source, has hired experts to look into options for its stake as part of a larger assessment of its holdings.

If PetroChina goes ahead with the sale, Ineos, a chemicals and industrial company, is the most likely buyer, according to the source. Grangemouth has been controlled by Ineos since 2005.

A separate source said: ‘The hope [in the oil industry] is that they sell the stake to Ineos. In terms of buyers, it will be a pretty short list.’

PetroChina is attempting to transition away from fossil fuels with this move. Renewables are expected to account for a third of the company’s energy mix by 2030, and 50% by 2050.

Grangemouth has been refining since 1919, and it supplies the majority of Scotland’s fuel, as well as the North of England and Northern Ireland.

However, the sector was severely harmed by the Covid outbreak, which coincided with a drop in oil consumption.

Petroineos Manufacturing Scotland’s most recent reports, which only include the Grangemouth refining operation, indicate a pre-tax loss of £89.9 million in 2020, up from £26.1 million the year before. The company’s revenue dropped by roughly £45 million to £210 million.

It was reported at the outset of the pandemic that Petroineos executives had requested a loan worth hundreds of millions of pounds from the Scottish and UK governments.

However, since then, worldwide demand for oil has risen dramatically. Given the wild swings, it’s difficult to say what the stake’s worth might be.

Petroineos and Ineos both declined to comment. PetroChina stated that it ‘does not comment on speculations.’

For the latest Business News Follow BOL News on Google News. Read more on Latest Business News on oldsite.bolnews.com