BP will sell its petrochemical business for $5bn (£4.1bn) to INEOS which BP says employs 1,700 staff worldwide. The sale is in line with BP’s plan to sharply cut carbon emissions by 2050 with the funds intended to be invested in the transition to renewable energy.
Bernard Looney, BP Chief Executive, says that the firm is looking at its assets to decide on which ones to sell in line with the strategy. Under the terms of the agreement, INEOS will pay BP a deposit of $400 million and will pay a further $3.6 billion on completion.
An additional $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. Subject to regulatory and other approvals, the transaction is expected to complete by the end of 2020.
In total, the businesses have interests in 14 manufacturing plants in Asia, Europe, and the US, and in 2019 produced 9.7 million tonnes of petrochemicals. Some of the businesses are in the UK, the US, Trinidad and Tobago, Belgium, China, Korea, Taiwan, Malaysia, and Indonesia.
The energy company is selling the following manufacturing plants and their primary products:
- Americas: Cooper River, South Carolina (PTA – bp 100%); Texas City, Texas (PX and metaxylene – bp 100%); Eastman bp Texas City Production Agreement (acetic acid); Atlas Methanol, Point Lisas, Trinidad & Tobago (methanol – bp 36.9%).
- Europe: Hull, UK (acetic acid, acetic anhydride – bp 100%); Geel, Belgium (PTA, PX – bp 100%).
- Asia: Zhuhai, China (PTA – bp 91.9%), Chongqing, China (acetic acid, acetate esters – bp 51%); Nanjing, China (acetic acid – bp 50%); Merak, Indonesia, (PTA – bp 100%); Kertih, Malaysia (acetic acid – bp 70%); Ulsan, South Korea (acetic acid and vinyl acetate monomer – bp ~50.9%); Taichung, Taiwan (PTA – bp 61.4%); Mai Liao, Taiwan (acetic acid – bp 50%).
In a statement, BP says that the petrochemical plants attached to BP’s oil refineries in Gelsenkirchen and Mulheim in Germany will be spared from the sale.
In June, BP announced plans to cut 10,000 jobs blaming a decline in demand occasioned by COVID19. This agreement means that BP has now received $15 billion of divestments and other disposals to date.
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