BRIEFING FOR FIRST MINISTER MEETING WITH JIM RATCLIFFE, INEOS Wednesday, 19 October 2016 Key Message The Scottish Government values the significant contribution Ineos makes to the Scottish economy, and recognises the important role Ineos can play as new entrants to the North Sea. The Scottish Government wants a sustainable future for the petrochemical and refinery business at Grangemouth Who Jim Ratcliffe, CEO and Chairman, Ineos What REDACTED Why REDACTED Where The Capital Hotel, 22-24 Basil Street, London SW3 1AT When Wednesday, 19 October 2016, 10:00am Officials David Ritchie, Deputy Director, Hydrocarbons Division REDACTED Attached documents REDACTED ANNEX A: SUMMARY Purpose of Meeting REDACTED Refinery & Petrochemical Plant Ineos is a large scale chemical company, which operates 65 manufacturing sites across 16 countries, with around 17,000 employees. The Grangemouth refinery and petrochemicals facility is Ineos’ largest production centre. REDACTED Scottish Government Moratorium & UOG Research Scottish Government has commissioned a comprehensive programme of evidencegathering into UOG, which will be followed by a public consultation that will give stakeholders and communities an opportunity voice their views. The key milestones that were outlined publically on 8 Oct 2015 are set out below: Commission research Publish final research reports Pre-consultation engagement Public Consultation Consultation Analysis January/February 2016 Summer 2016 Winter 2015/16 – Autumn 2016 Winter 2016/17 Spring 2017 1. The research projects include:       Transport - understanding & mitigating community level impacts (Ricardo) Decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities (AECOM) Understanding and monitoring induced seismic activity (the BGS) Economic impacts (KPMG) Climate Change (UK Committee on Climate Change) Public Health Impact Assessment (Health Protection Scotland). 2. The Research Reports will be published soon; however the emerging evidence is consistent with the findings of the Independent Expert Scientific Panel. 3. Key research findings include:  The technology exists to allow the safe extraction of such reserves, subject to robust regulation being in place.  UOG industry would present challenges for meeting Scotland’s climate change targets.  using gas as a feedstock in the petrochemical industry could have significant economic benefits given the contribution of the sector to the Scottish economy.  In terms of wider economic impacts, development constraints in the midland valley suggest that the impact of UOG in terms of GVA and supported employment is estimated to be relatively low, and significantly lower than the offshore industry in Scotland. 4. SG has committed to undertaking work to review the strength and suitability of the current planning and environmental regulatory regimes. The robustness of the regulatory regime is vital to mitigating any risks from UOG and avoiding the types of environmental impacts that have emerged in North America. ANNEX B: REDACTED REDACTED ANNEX C: REDACTED REDACTED ANNEX D: INEOS UPSTREAM – NORTH SEA INEOS Upstream Business  INEOS Upstream is Ineos’ new oil and gas exploration and production business.  The Business consists of two divisions; INEOS Breagh, responsible for the Group’s North Sea exploration and production operations, and INEOS Shale, responsible for exploring for shale gas within our licences onshore UK. REDACTED Ineos Investment in North Sea  The North Sea oil and gas sector continues to face considerable challenges.  REDACTED On (1 December 2015) Ineos completed the purchase of all North Sea gas fields owned by the DEA Group, a German-based subsidiary of the LetterOne Group. REDACTED Acquisition of North Sea Assets  On 11 October 2015, Ineos announced it was entering the UKCS via the acquisition of LetterOne's North Sea gas fields for a reported consideration of US$750m (£489m). On 1 December, INEOS completed the acquisition of DEA Group's UK North Sea portfolio.  INEOS will gain operatorship of five onstream producing assets – Breagh, Clipper South, Cavendish, Topaz and Windermere – and equity in the onstream Anglia, Devenick, Minke, Orca UK and Saturn Area fields. Production from Breagh and Clipper South in 2014 represented around 4% of total UK gas production. REDACTED ANNEX E: BIOGRAPHIES JIM RATCLIFFE, Chairman, Ineos Jim Ratcliffe is chairman of INEOS and owner of approximately two thirds of the company’s stock. He graduated from the University of Aston, Birmingham with a degree in Chemical Engineering in 1974. Also a qualified accountant, Jim worked for Exxon Chemicals and Courtaulds before moving into private equity finance in 1989. In 1992 he led the team in the buyout of the Inspec Group from BP for £40 million and in 1998 created INEOS by purchasing the chemical operations from Inspec. Ratcliffe has grown INEOS rapidly by making ever-bigger acquisitions. INEOS’ entire modus operandi assumes that it can double the average EBITDA (earnings before interest, taxes, depreciation and amortization) of a cyclical business over a five-year period. TOM CROTTY, Ineos Director Tom is a Director of INEOS with responsibility for Corporate Affairs and Communications and the development of INEOS business in new territories. Following a 20 year career with ICI, he came into INEOS in January 2001 as CEO of INEOS Fluor. He subsequently became CEO of INEOS ChlorVinyls and then INEOS Olefins & Polymers Europe. Tom is a past President of the European Petrochemicals Association (EPCA). He is currently vice President of EPCA, Vice President of Plastics Europe, Chairman of Cogent, the UK Sector Skills Council for the Process Industries and sits on the UK’s CBI Climate Change Board.