BP spinoff plans regional chemicals office in Houston area

05 January 2005 22:44  [Source: ICIS news]

HOUSTON (CNI)--BP America unveiled plans Wednesday to establish regional headquarters in League City, Texas for the North American olefins and polymers division of its new stand-alone global olefins and derivatives company.

The yet-to-be-named global company is to be spun off later this year. Including all four of its divisions, it will have $9bn (Euro6.8bn) in assets and $15bn in third party sales globally and will begin operating separately from BP after an initial public offering (IPO) expected later this year. Global headquarters for the company is in Chicago.  

BP held a press conference in League City with Texas Governor Rick Perry and Mayor Jeff Harrison at the Marina View Tower site, where the division will base 150 people in the top two stories of the building.

“Texas and Bay Area Houston presented us with a very attractive set of options,” said Dennis Seith, senior vice president of North America operations for the new company. “The strong pro-business environment in Texas, easy access to our manufacturing sites, customers and global financial and trading markets as well as significant populations of highly-skilled professionals made the location very competitive among our choices.”

Seith added, “The incentives offered by League City and the State of Texas, particularly the Texas Enterprise Fund, were vital factors in making our final decision.”

Doug Frazior, economic development director for League City, told CNI the Texas Enterprise Fund will give BP $5000/job ($750 000) at the regiional office. The Texas Legislature approved the $293m fund in 2003 to lure jobs to the state.

Frazior said the average salary of the 150 workers will be $126 000/year.

Other incentives include a grant by League City equal to the amount the company would pay the city in business personal property taxes for three years, and 50% of those taxes for another two years. Frazier said the grant will be at least $58 000/year.

Workers at the company will also receive free in-state tuition at public colleges and universities.

Most of the employees will come from the company’s headquarters in Chicago and parts of the Houston area, Frazior said.

The Houston area lost to Chicago last year in the competition for the company’s headquarters. Frazior said Perry offered Texas Enterprise Fund money to lure part of the company to the Houston area.

Perry said in a statement the move will invest $5.7m in the Texas economy.

“By establishing the operating and commercial headquarters for this piece of its business in League City, BP is furthering Texas’ reputation as the nation’s leading energy state and the best place in the country to do business,” Perry added.

The global stand-alone olefins and derivatives company will produce more than 15m tonne/year of petrochemicals - making it among the five largest olefins and derivatives companies in the world. The company will manufacture products such as acrylonitrile, polyethylene, polypropylene, linear alpha olefins, polyalphaolefins, and solvents. 

By: Brian Ford
+1 713 525 2653

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