The North Sea energy industry will soon have a newcomer in its ranks after Swiss chemical giant Ineos confirmed plans for an upstream oil and gas business.
Ineos, which owns the huge petrochemicals complex and oil refinery at Grangemouth, has not yet announced the move.
But its website is advertising a string of management posts, including a chief executive and operations director, for the new division.
The CEO has a remit for “leading a strategic review to support the Ineos entry into North Sea production, culminating in investment recommendations to the main Ineos board”.
Up until now, few downstream participants have shown an interest in moving into capital intensive offshore oil and gas production, but this is starting to change.
Refiners and petrochemical firms are seen as potential new entrants to the market because upstream offers them an opportunity to secure crude supplies and offset some of the peaks and troughs of the oil price cycle.
Hamza Khan, senior commodity strategist at Dutch finance group ING said: “Investment in oil assets can bring stability to European refining margins.”
Ineos said last week it plans to spend up to £640million on shale gas exploration in the UK.
Its Grangemouth facilities are currently supplied by North Sea oil and gas, but there are plans to also process imported ethane derived from shale gas from the US.
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