This archive report was first published on 3 July 2020.
BP has made significant strides in its efforts to reduce carbon emissions by 2050, with the latest move being the sale of its petrochemical business to INEOS for $5 billion (£4.1 billion). The sale is part of BP's strategy to invest in renewable energy and transition away from fossil fuels.
According to Bernard Looney, BP's Chief Executive, the company is reviewing its assets to determine which ones to sell in line with its strategy. Under the terms of the agreement, INEOS will pay BP a deposit of $400 million and a further $3.6 billion on completion.
Additionally, $1 billion will be deferred and paid in three separate installments of $100 million in March, April, and May 2021, with the remaining $700 million payable by the end of June 2021. The transaction is subject to regulatory and other approvals and is expected to complete by the end of 2020.
The petrochemical business has interests in 14 manufacturing plants in Asia, Europe, and the US, and produced 9.7 million tonnes of petrochemicals in 2019. The plants are located in the UK, the US, Trinidad and Tobago, Belgium, China, Korea, Taiwan, Malaysia, and Indonesia.
BP is selling the following manufacturing plants and their primary products:
- Americas: Cooper River, South Carolina (PTA – 100%); Texas City, Texas (PX and metaxylene – 100%); Eastman bp Texas City Production Agreement (acetic acid); Atlas Methanol, Point Lisas, Trinidad & Tobago (methanol – 36.9%).
- Europe: Hull, UK (acetic acid, acetic anhydride – 100%); Geel, Belgium (PTA, PX – 100%).
- Asia: Zhuhai, China (PTA – 91.9%), Chongqing, China (acetic acid, acetate esters – 51%); Nanjing, China (acetic acid – 50%); Merak, Indonesia, (PTA – 100%); Kertih, Malaysia (acetic acid – 70%); Ulsan, South Korea (acetic acid and vinyl acetate monomer – ~50.9%); Taichung, Taiwan (PTA – 61.4%); Mai Liao, Taiwan (acetic acid – 50%).
BP has stated that the petrochemical plants attached to its oil refineries in Gelsenkirchen and Mulheim in Germany will be spared from the sale.
As part of its efforts to reduce costs, BP announced plans to cut 10,000 jobs in June, citing a decline in demand occasioned by COVID-19. This agreement means that BP has now received $15 billion of divestments and other disposals to date.
Related articles:
- BP Announces 10,000 Job Cuts
- OPEC+ Approves Biggest Ever Oil Cut, 9.7M BPD
