The leaders of INEOS have once again proved themselves to be clever and innovative in seizing opportunities for growth and the reshaping of their company in both oil and chemicals.
The new deal with PetroChina and parent group China National Petroleuem Corporation (CNPC) gives the company access to the all-important Chinese market.
It also reduces the company’s exposure to a loss-making European oil refining business which hammered its finances when the oil price plummeted in 2008, leaving it with €845m in inventory losses that year.
The deal will also please the company’s lenders who had to cope with debt covenant renegotiation during the darkest days of the downturn.
The first part of the agreement is a framework agreement with PetroChina to form joint ventures – by the end of June 2011 – in trading and refining at Grangemouth, Scotland and Lavera, France. Swiss headquartered INEOS also agreed with CNPC to share refining and petrochemical technology and expertise.
The second part could be important for INEOS as it tries to expand beyond its stronghold of Europe and North America. With deals like this and the proposed European ethylene terminal at Antwerp, Belgium, INEOS is proving itself to be not just a survivor, but a versatile and adaptable company.