BP agrees to sell global petrochemicals business to INEOS for $5 billion

Must Read

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana,...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during...

2020 expected to be a ‘one and done’ recession as oil demand bounces back – API

The enormous challenges triggered by the COVID-19 pandemic this year have caused major disruptions to the global...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

(S&P Global) London — BP has agreed to sell its global petrochemicals business to INEOS for $5 billion as part of plans to “reinvent” BP into a more focused, integrated energy company.

The sale agreement comprises all of BP’s aromatics and acetyls businesses, including assets, technology and licences, as well as related assets that are concentrated mostly in Asia, the US and Europe, BP said.

Last year, BP’s petrochemicals division produced 9.7 million mt of products and employed over 1,700 staff worldwide.

The sale will also include related interests, such as the chemical recycling technology BP Infinia, and BP’s interest in acetylated wood developer Tricoya, BP said.

“This is another significant step as we steadily work to reinvent BP,” CEO Bernard Looney said in a statement. “Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”

Petrochemicals company INEOS has bought a number of businesses from BP over the past two decades, notably the $9 billion purchase of Innovene in 2005, a BP subsidiary that comprised the majority of BP’s’s then chemicals assets, and two refineries.

Divestment proceeds

Following the agreed deal, BP said it has now meet its current $15 billion divestment target through 2019 and 2020, a year earlier than expected.

The move comes two weeks after BP said it plans to write off up to $17.5 billion worth of assets after cutting its long-term price assumptions for oil and gas to reflect expectations that the coronavirus pandemic will accelerate a shift away from fossil fuels.

The write-offs would likely push BP’s debt gearing to 47.8%, by far the highest in the sector, according to Royal Bank of Canada analyst Biraj Borkhataria.

Proceeds from the sale of its petrochemicals business will be used for “general corporate purposes,” BP said.

Under the terms of the agreement, INEOS will pay BP a deposit of $400 million and will pay a further $3.6 billion on deal completion. An additional $1 billion will be deferred and paid in three separate installments of $100 million each in March, April and May 2021, with the remaining $700 million payable by the end of June 2021.

Subject to regulatory and other approvals, the transaction is expected to complete by the end of 2020.

- Advertisement -

Latest News

2020 expected to be a ‘one and done’ recession as oil demand bounces back – API

The enormous challenges triggered by the COVID-19 pandemic this year have caused major disruptions to the global...

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana, the high quality oil discovered...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during which the two leaders discussed...

Department of Energy remains operational, actively involved in Payara negotiations – Vickram Bharrat

Guyana’s Minister of Natural Resources, Vickram Bharrat, told Members of Parliament on Tuesday that the Department of Energy (DE) remains operational and...

Saudi Arabia denounces OPEC+ members trying to cheat oil quota

(Bloomberg) --Saudi Arabia showed its determination to stop OPEC+ members cheating on their production quotas, delivering a thinly veiled dressing-down to its...

More Articles Like This