British petrochemical giant Ineos has agreed a deal worth up to 1.3 billion US dollars (£1 billion) to buy the oil and gas business from Danish group Dong Energy.
Ineos, which is controlled by British billionaire Jim Ratcliffe, said the move will propel it into a top 10 company and the biggest private group operating in the North Sea.
It will boost its so-called upstream division, seeing it add a portfolio of production, development and exploration sites off the coast of Denmark, Norway and West of Shetland area. Around 440 staff will also transfer from Dong on completion of the deal, which is expected in the third quarter.
Mr Ratcliffe, chairman of Ineos, said the business was a “natural fit” for the group as it expands its upstream arm.
“This business is very important to us at this stage of our growth plans and we are delighted with the expertise that comes with it,” he said.
Ineos has agreed to pay 1.05 billion US dollars (£809 million) and a further potential 250 million US dollars (£193 million).
Henrik Poulsen, chief executive of Dong, said: “Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business. With the agreement with Ineos we’ve obtained just that.”
Dong Energy has a £4bn offshore windfarm planned for the North Sea coast off of Yorkshiore, while Ineos has a large petrochemical presence in the region.