Jim Ratcliffe has blasted the ‘utter madness’ of Labour’s energy policies and slammed the ‘idealogues running the UK’ as his company ramps up investment in the US.
The Ineos chief and co-owner of Manchester United said there was ‘no rational argument’ for banning new drilling in the North Sea or hitting oil and gas producers with the windfall tax.
Announcing his Ineos Energy business has joined forces with Shell to explore untapped reserves in the Gulf of Mexico, he said he would rather invest in Donald Trump’s America than Britain.
Ineos chairman and founder Jim Ratcliffe
Brian Gilvary, the chairman of Ineos Energy, also spoke out, describing the North Sea tax regime as ‘the most unstable of any oil and gas zone in the world’ – saying it amounted to ‘political vandalism’.
Energy secretary Ed Miliband faces growing criticism over his refusal to grant new drilling licences – leaving projects such as the Jackdaw gas and Rosebank oil fields in the British North Sea on ice.
And Chancellor Rachel Reeves is facing calls to scrap the windfall tax that industry bosses argue is hitting investment and jobs.
‘If you look at the UK, with the windfall tax and the cessation of new drilling licences being issued, there’s no rational argument that would ever get you close to making those decisions,’ said Ratcliffe.
‘Shutting down a very profitable oil and gas basin kills industry, it jeopardises national security, and it improvises the population in the UK.
‘It really is utter madness to shut it down and then rely on imports from the rest of the world when we’re in an unstable position.
‘Will we end up with rational people running the UK? Because at the moment it’s not being run in a rational way. We’ve got idealogues running the UK.
‘You would hope that the UK – it has normally been run by rational people – would be run by rational people again.’
Ineos Energy has now joined forces with Shell to explore for untapped oil and gas in the Gulf of Mexico.
The two companies will focus on opportunities near Shell’s giant Appomattox platform 80 miles off the coast of Louisiana.
Ineos said it was part of its ‘deliberate shift of investment to the United States’ and ‘reflects a clear view from Ineos leadership about where the conditions for long-term energy investment are most stable’.
The Energy Profits Levy has pushed the headline rate of tax on North Sea profits to 78%
Ratcliffe said: ‘Growth in an economy is highly correlated to competitive energy prices, and it’s a huge issue for national security. If you can’t get energy, then you can’t run your hospitals, run industry or heat your houses.
‘Europe is all over the place. From an investment point of view, you always go to the stable rather than the unstable. I would have a lot more confidence in investments in America in the energy sector than I would in Europe.’
Miliband is under mounting pressure to change course and open up the North Sea by giving the green light to drilling Jackdaw and Rosebank.
Trump last month branded Labour’s ‘tragic’ refusal to exploit lucrative oil and gas reserves ‘absolutely crazy’.
And Reeves is facing calls to scrap the windfall tax that industry bosses argue is hitting investment and jobs.
The so-called Energy Profits Levy has raised the headline tax rate on oil and gas profits to 78 per cent – among the highest in the world.
Calling for the windfall tax to be scrapped, Gilvary said: ‘It’s the most unstable and has been the most unstable fiscal regime of any oil and gas zone in the world.
‘The idea that we’re importing gas with a higher CO2 footprint than our existing domestic production is extraordinary. I think that there’s a day of reckoning coming soon. I think it’s political vandalism what’s happening right now.
‘We are the only nation in the world with a resource that could be developed for energy and choosing to close it down.’
Last year was the first since 1964 that no new wells were drilled in the British North Sea – with the industry blaming the windfall tax and ban on licences for exploration in new areas.
Britain has become increasingly reliant on oil and gas imports while some argue that tax revenues from new North Sea drilling could be used to ease the pressure on households and businesses battered by soaring fuel and energy bills.
Ratcliffe said: ‘If you have a renewables energy policy for a nation like the UK, which we do at the moment, you have to have a renewables plus gas strategy, because renewables by definition are intermittent.
‘That means sometimes they run, sometimes they don’t – it can be solar, it can be wind. Solar doesn’t run at night, and wind doesn’t run when there’s no wind, so you have to have a gas strategy because you’ve got to run your gas-fired power stations when solar isn’t working or wind isn’t working.
‘You have to have hydrocarbons. There is no such thing as a renewables strategy – you have to have renewables plus gas or something else.’
A Government spokesman said: ‘The UK has one of the most robust fiscal frameworks in the world which helps maintain economic stability while unlocking £120billion of investment in our future infrastructure with disciplined day-to-day spending.
‘As a result, borrowing has fallen by £20billion, debt is on a downward path, and the UK’s economic resilience is stronger.’
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