Profits have already slumped. The pipeline made post-tax profits of £65m in 2019, the year Ineos announced it was investing £500m into the system to “extend the life of the pipeline by at least another 20 years, supporting North Sea oil and gas production into the 2040s.”
Those profits had shrunk to £37m by 2022 and the biggest spend is likely to be on decommissioning the system sometime in the early 2030s.
Michelle Thomson, the SNP Member of the Scottish Parliament for Grangemouth, said the threat to the Forties was another blow for an already damaged area.
She said: “Too many politicians have limited understanding of industry. For too long Westminster has taken for granted tax revenues from oil and gas without understanding the long-term nature of investment and the impacts of changes in taxation on critical infrastructure.
“Grangemouth is already reeling from the shock of the announcement to close the refinery … The entire area already risks losing jobs and skilled labour so this latest warning is utterly dispiriting.”
Mike Tholen, the sustainability and policy director at Offshore Energies UK, the trade body for oil and gas operators, said: “Operators are well aware of the risk of early loss of infrastructure and are working closely with regulators and policy makers.
“We have warned of the £13bn economic loss that inappropriate changes to the fiscal regime pose for oil and gas production and future energy infrastructure.”
The Treasury was asked for a comment.
The Forties Pipeline System began life in 1975, laid across the 110 miles of seabed between BP’s massive Forties oil field and Cruden Bay on Scotland’s east coast.
In the 50 years since then, many more North Sea oil fields have opened up and been plumbed into the same Forties pipeline. Up to 80 offshore platforms now rely on the system and would face likely closure without it.
At its peak, around 1999, the system carried 1m barrels of oil a day. By 2019 that had fallen to 400,000.