It is the oil giant’s second major sales to INEOS, the vehicle of reportedly Britain’s richest man, Jim Ratcliffe
() said it has agreed to sell its global petrochemicals business to INEOS for a total consideration of $5bn billion.
It is the oil giant’s second major disposal to INEOS, the vehicle of Jim Ratcliffe (reportedly Britain’s richest man), which bought BP’s chemicals and refineries operations in a company-making deal in 2005.
BP’s petrochemicals arm employs over 1,700 staff worldwide and these people expected to transfer to INEOS on completion of the sale. The petrochemicals operation is focused on two main businesses – aromatics and acetyls.
“Strategically, the overlap with the rest of bp is limited and it would take considerable capital for us to grow these businesses,” the FTSE 100-listed group said.
INEOS is paying US$400mln up front this time and a further US$3.6bn on completion with the final payment of US$1bn to be made in instalments through to 2021, the oil major added.
Bernard Looney, BP’s chief executive officer commented: “This is another significant step as we steadily work to reinvent BP. These businesses are leaders in their sectors, with world-class technologies, plants and people.
INEOS is best known as the owner of the Grangemouth refinery in Scotland but made its name with the acquisition of BP’s chemicals division Innovene for US$9bn in 2005, which included its refineries and chemicals businesses.
Brian Gilvary, BP’s chief financial officer, said: “With today’s announcement we have met our $15 billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us.”
“bp has had a long relationship with INEOS and this agreement reflects the mutual respect and trust that exists between us.
BP has undertaken a determined shift toward sustainable fuel under new chief executive Looney.
Earlier this month, it announced a write-off of up to US$17.5bn as it reassessed its forecasts of the long-term oil price assumption.
Write-offs on the exploration portfolio were a substantial part of this charge.
BP shares rose 1.8% to 310.2p.