As part of its plan to reinvent itself through the energy transition, BP has agreed to sell its global petrochemicals business to UK’s Ineos for US$5 billion, the supermajor said on Monday.
The US$5-billion deal with Ineos includes the sale of BP’s global aromatics, acetyls, and related businesses and is expected to be complete by the end of this year, pending regulatory and other approvals.
The manufacturing plants and their primary products that str part of the sale include those in Cooper River, South Carolina, Texas City, Texas, and the Eastman bp Texas City Production Agreement. Outside America, the businesses included in the sale are manufacturing plants in Hull, UK, and Geel in Belgium, as well as stakes in plants in China, Malaysia, South Korea, and Taiwan.
The agreed sale is the next strategic step in the reinvention of BP from an oil and gas company to an energy company that could compete in the energy transition, BP said.
The transaction also helps the supermajor to achieve its target for US$15 billion in asset divestitures a year ahead of schedule.
“Strategically, the overlap with the rest of bp is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated bp, we have other opportunities that are more aligned with our future direction,” chief executive Bernard Looney said in a statement.
“Today’s agreement is another deliberate step in building a bp that can compete and succeed through the energy transition,” the top executive added.
Earlier this month, BP said it would cut 10,000 jobs or around 15 percent of its workforce. As BP aims to reinvent itself as an energy company and a net-zero company by 2050 and sooner, the UK-based supermajor is resorting to job cuts—most of which are in office-based positions, to reduce its costs as the downturn has severely affected its finances.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.