BP to sell Texas City refinery to Marathon Petroleum for $2.5bn

08 October 2012 14:59  [Source: ICIS news]

LONDON (ICIS)--BP has reached an agreement to sell its Texas City, Texas refinery and a portion of its retail and logistics network to US refiner Marathon Petroleum for $2.5bn (€1.9bn), the UK-based energy and chemicals firm said on Monday.

The total includes $600m of cash, an estimated value of $1.2bn for hydrocarbon inventories and a $700m six year earn-out arrangement based on future margins and refinery throughput, BP added.

BP expects the transaction will close by early 2013.

With this agreement, the total value of the divestments that BP has agreed since the beginning of 2010 is now more than $35bn. The company expects this to reach $38bn by the end of 2013.

On 19 September, there were media reports that Ohio-based Marathon Petroleum was interested in buying the Texas City refinery. BP previously said it planned to sell it.

The refinery ranks as the US’s third largest with a processing capacity of around 475,000 bbl/day.

In August, BP announced it agreed to sell its 266,000 bbl/day Carson refinery in California and related logistics and marketing assets to Tesoro for $2.5bn.

“Today’s announcement is the second major milestone in the strategic refocusing of our US fuels business,” said Iain Conn, chief executive of BP’s global refining and marketing business.

“Together with the sale of our Carson, California refinery, announced in August, the divestment of Texas City will allow us to focus BP’s US fuels investments on our three northern refineries, which are crude feedstock advantaged, and their associated marketing businesses," he added.

($1 = €0.77)

By: Franco Capaldo
+44 (0)20 8652 3214

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