An energy business part-owned by Sir Jim Ratcliffe, one of Britain’s richest men, has appealed to the government for an emergency loan amid a slump in oil demand triggered by the coronavirus crisis.
Sky News has learnt that Petroineos, which is jointly owned by Sir Jim’s Ineos Group and the state-owned Chinese company PetroChina, has been in talks for weeks with the Scottish and UK governments about a loan package worth hundreds of millions of pounds.
Industry sources said that Petroineos, which is based at Ineos’s Grangemouth refinery in Falkirk, had signalled that it needed as much as £500m in state support, although they cautioned that a formal request could ultimately be for a substantially smaller sum.
Its structure could also vary from a conventional commercial loan, they added.
The appeal comes a year after Sir Jim, who is estimated by The Sunday Times Rich List to be the UK’s third-wealthiest person with an £18bn fortune, relocated to Monaco for what reports described as tax reasons.
The disclosure of his joint venture’s request for taxpayer funding will raise fresh questions about billionaires’ judgement in seeking state support for their businesses.
Sir Richard Branson has faced criticism for warning that Virgin Atlantic would collapse without government support, even as he prepares to sell a stake in his Virgin Galactic space tourism venture that could raise in the region of $400m.
Like Sir Jim, the Virgin Group tycoon has also chosen to live offshore, although he recently denied that his long-standing residence in the British Virgin Islands had been motivated by the tax benefits of doing so.
One government source said a loan was unlikely to be granted to Petroineos without further evidence of the extent to which the company had sought to access its existing shareholders’ resources.
Petroineos processes 420,000 barrels of oil every day at its two refineries at Grangemouth and Lavera in France.
It was unclear on Tuesday whether Petroineos had also sought support from the French government.
The company produces 19 million tonnes of oil products annually, and is one of the biggest refiners of its kind in Europe.
Its request for state funding is understood to have been lodged with the Scottish government, while discussions have also been held with the Department for Business, Energy and Industrial Strategy and the Treasury.
An Ineos spokesman said: “It should not come as any surprise that the refinery is talking to government at a time when demand for fuel has fallen during the period of lockdown.”
He refused to respond to further questions about Petroineos’s funding talks.
The loan appeal is said to be under review as part of Project Birch, the UK government’s unit set up to assess companies’ requests for support during the COVID-19 pandemic.
Among the companies which have asked ministers for urgent help are Tata Steel UK, owner of the Port Talbot steelworks, the supercar maker McLaren and Virgin Atlantic Airways.
It is not the first time that Sir Jim has turned to the government to provide funding for his business interests.
In 2014, he secured a £230m state loan guarantee to facilitate the expansion of the Grangemouth site.
The purchase of the refineries in Scotland and France in 2005 was a landmark moment in Sir Jim’s progress towards building one of the world’s leading chemicals groups.
Ineos now employs 22,000 people and is one of the world’s largest privately-owned companies.
The company said it had not used taxpayers’ money to subsidise workers’ wages.
The Pig-branded hotel chain, in which Sir Jim is the controlling shareholder, has, however, furloughed the majority of its workforce.
Since amassing his multi-billion pound fortune, the businessman has acquired an array of interests in sports and luxury brand manufacturing, including the Team Ineos cycling franchise and Britain’s Americas Cup team.
He has also signalled an interest in a takeover of Chelsea Football Club.