Jim Ratcliffe's takeover bid for Manchester United Plc (NYSE:MANU) might be far from a certainty.
But whatever the outcome he will have some skin in the game as the UK billionaire already owns the right to explore for shale gas underneath the Premier League club’s Carrington training complex and as near as half a mile away from Old Trafford.
Ratcliffe’s company INEOS, expected to be the vehicle that will own the club if Sir Jim’s takeover bid is successful, owns a 60% stake in PEDL193 (an onshore oil and gas licence) which gives the company the right to access hydrocarbons beneath parts of Manchester such as Trafford Park, Stretford, Eccles, Urmston, Irlam and Sale.
INEOS paid £30mln in cash back in 2015 to acquire a 50% stake in PEDL193 in a deal with London-listed Igas Energy along with interests in other parts of the North West, East Midlands and Scotland.
It also committed, at that time, that it would invest £138mln into exploration programmes intended to explore for and advance shale gas projects within those licences.
The aim of the investments would be to take forward projects towards commercial production (which would have meant fracking wells).
Ratcliffe has been accused of using the Manchester United bid as its latest move on the greenwashing front, having already poured money into sports brands like the British sailing team, while its core petrochemical business emits millions of tonnes of CO2, whilst also sourcing and importing gas and oil as feedstock.
“INEOS believes that an indigenous shale gas industry will transform UK manufacturing and that we can extract the gas safely and responsibly,” the company said in 2015.
This week, INEOS also bought a slug of US shale oil and gas assets for US$1.4bn that alongside a deal to enter the liquified natural gas market would suggest it may have lost hope in UK fracking.
Even so, PEDL193 remains an active licence and its current exploration period runs until the end of 2024.
If Ratcliffe successfully purchases Manchester United, INEOS would also acquire the club’s substantial landholding in the surrounding areas including parts of PEDL193.
Shale exploration in Manchester and the North West
Wayne Rooney scored a brace at Old Trafford on 29 March 2014 helping United to a 4 – 1 victory against Aston Villa which, at the time, briefly, relieved some pressure on David Moyes a month before he was relieved of his position as Manchester United manager.
Three days later at the Barton Moss site, in Irlam, in PEDL193, about five miles from the stadium, London-listed IGas Energy announced it had completed the drilling of an exploration well which confirmed the presence of Bowland shale formations with the same geological features that were controversially fracked near Blackpool by Cuedrilla.
At that time, the Barton Moss well results led to early estimates by IGas that its overall position in the northwest of England could host a potential 147 trillion cubic feet of gas – to put that estimate in context, two weeks ago, the UK’s latest North Sea gas discovery of 302 billion cubic feet was the country’s largest for a decade.
The actual size of Britain’s shale resources, and more importantly, the technical and environmental viability has not since been proven as almost all projects have been stifled at the planning permission stage with local councils blocking project proposals.
At Westminster, signals have been mixed with soundbites and superficial sentiment easier to come by than tangible support.
Liz Truss’s short reign at Number 10 was the most recent flip-flop for investors in UK shale to endure, as her enthusiasm for fracking was swiftly undone by Rishi Sunak.
Public opinion against fracking, however, has been more stoic and set in place with local communities evidently vocal in most parts of the country where fracking has been proposed, particularly following the earth tremors measured at Cuadrilla’s now infamous site on the outskirts of Blackpool.
Cuadrilla, which is privately owned said the tremor (measuring 2.1 on the Richter scale in 2019) was a ‘minor seismic event’.
Proactive contacted INEOS for comment.