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Sir Jim Ratcliffe's Ineos takes £63m fracking hit

Jim Ratcliffe
Jim Ratcliffe

Sir Jim Ratcliffe's business empire Ineos has suffered a £63m hit after a ban on fracking wrecked its efforts to exploit Britain's shale gas reserves.

The billionaire's £20bn chemicals conglomerate has written off spending on exploring and testing following a Government decision to halt the controversial technique due to fears it could cause earthquakes.

Ineos has long been a strong supporter of fracking - where high-pressure chemicals and water are pumped into rock to cause cracks and release gas - arguing that Britain needs a way of cutting its energy costs and reliance on imports.

The company teamed up with IGas in 2015 as part of a government-backed "dash for gas" to access potentially billions of cubic feet of the fossil fuel in rocks underneath Lancashire and beyond - reserves which could potentially have powered the country for decades.

But the industry had barely got off the ground last November when ministers halted the practice in England amid safety concerns.

The decision followed a report by the Oil and Gas Authority that found it was not possible to predict the "probability or magnitude of earthquakes linked to fracking operations".

Tensions were high after early mover Cuadrilla triggered tremors above limits set by the government, having been forced to halt operations years earlier in 2011 after causing an earthquake near Blackpool.

In newly published accounts for Ineos Upstream, the firm said: "The unsuccessful exploration and evaluation and impairment totalling £63m relates to the UK Government announcing in November 2019 an effective moratorium on hydraulic fracturing."

The accounts said that tests last March at a site in Springs Road, Nottinghamshire indicated there were significant levels of shale gas present.

In a sign it may not have entirely given up on the industry, Ineos said analysis of the wider basin continued but that it expects further development to be severely restricted due to the moratorium.

Sir Jim has criticised the government's stance on fracking, saying it is not listening to the science. Ministers encouraged the practice but then introduced seismic limits that many in industry said were too low.

In April 2019 Ineos said: “It beggars belief that instead of developing a safety-led regulated indigenous gas industry that would provide decades’ worth of energy, we face being increasingly dependent on importing £400m a month worth of foreign gas which has a greater carbon footprint. This makes no sense."