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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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."
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Government launches full review of parental leave and pay – what could it mean for you?
The government wants parental leave to be fairer - will its shake-up fix the widespread problem for families?
-
Nationwide: House prices see biggest monthly fall in over two years
UK house prices dropped by 0.8% in June, according to Nationwide. We reveal the top-performing and worst-performing regions