INEOS offered $ 1 billion by PetroChina 50 per cent share

INEOS is offered $ 1 billion by PetroChina for a 50 per cent share

5:04 PM, 8th June 2011
INEOS is offered $ 1 billion by PetroChina for a 50 per cent share
Calum MacLean, CEO INEOS Refining.

HAMPSHIRE, UK: Recently PetroChina International (London) Co Ltd submitted an irrevocable offer to INEOS of $ 1,015,000,000 for a 50 per cent share in its European refining business. This business includes the refineries at Grangemouth in Scotland and Lavéra in France. The partnership with PetroChina will comprise a trading and refining joint venture. A new Swiss company will be incorporated to hold the INEOS investment. The two joint ventures will be operated independently of the INEOS Group.

 

INEOS and PetroChina will now work towards forming the proposed joint ventures in Q2 2011. “This new partnership will secure investment and the long-term sustainability of both sites in a highly competitive market and ensure we continue to be Europe’s leading independent crude oil refiner,” said Calum MacLean, CEO INEOS Refining.

 

This transaction will significantly enhance the group’s financial position. Group leverage was 4.3x EBITDA at the end of September 2010 and is expected to reduce to around 3.5x EBITDA following completion. Jim Ratcliffe, Chairman, INEOS said, “This offer is an important step on the way to INEOS forming a joint venture with PetroChina. When completed we will have a strategic partner with significant refining expertise that is integrated upstream with very strong equity crude positions. This agreement presents us with an opportunity to further develop our technology business in China and beyond.”

 

This deal will help create a true strategic partnership between the two companies. It will improve the long-term sustainability of the INEOS refineries, enhance security of supply for customers and secure jobs and skills in both the UK and France. The proposed joint venture is consistent with PetroChina’s strategy of building a broader business platform in Europe. The geographic location and production capabilities of the INEOS refineries are very favourable as both refineries are well located in terms of markets and access to raw materials and both have a significant production bias towards diesel, which is the fastest growing refined fuel in Europe.

© WOC News

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