BP to sell Texan refinery to Marathon Petroleum

Oil titan BP is to offload its Texas refinery and associated assets to American peer Marathon Petroleum Corporation for a total of 2.5bn dollars, as it continues to reposition its business in the US.

Oil titan BP is to offload its Texas refinery and associated assets to American peer Marathon Petroleum Corporation for a total of 2.5bn dollars, as it continues to reposition its business in the US.

BP said on Monday afternoon that it has reached an agreement with Marathon for the sale, which includes the 475,000-barrels-per-day refinery and a portion of retail and logistics network in the south-east of America.

The $2.5bn includes $0.6bn of cash at closing, an estimated value of $1.2bn for hydrocarbon inventories and a $0.7bn six-year earn-out arrangement based on future margins and refinery throughput.

Since the start of 2010, BP has sold a total of $35bn worth of assets as part of its divestment programme. This is expected to increase to $38bn by the end of next year.

"Today's announcement is the second major milestone in the strategic refocusing of our US fuels business," said Iain Conn, the 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."

BP has assured that it will remain a significant retailer of fuels in the US with around 8,000 BP-and ARCO-branded sites in the Midwest, Pacific Northwest and along the East Coast. The company expects the transaction to close by early next year.

"BP remains committed to supplying U.S. customers with the fuels, lubricants and petrochemicals they depend on while at the same time delivering long-term growth and profits to our shareholders and we are pleased to be delivering on the strategy we announced last year," Conn said.

"When we complete these sales and our Whiting Refinery upgrade project next year, we will have a smaller, well-positioned and highly competitive portfolio of refining and marketing businesses in the US."

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
2 Feb 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

When will interest rates go up?
UK Economy

When will interest rates go up?

Interest rates are now at 4%, and they could rise further in the months ahead.
3 Feb 2023
NS&I brings back one-year fixed bonds with highest rates since 2010
Personal finance

NS&I brings back one-year fixed bonds with highest rates since 2010

NS&I’s one-year fixed bonds are back on sale after being pulled off the market in 2019 - but is the rate any good?
1 Feb 2023
Covid-19 vaccines helped these stocks take off, but what’s next for these companies?
Investments

Covid-19 vaccines helped these stocks take off, but what’s next for these companies?

Dominic Frisby explores how the top vaccine stocks are doing as booster take-up remains at a low
2 Feb 2023