BP is to sell its Texas City, Texas refinery and other assets to US refiner and marketer Marathon Petroleum for $2.5 billion (€1.9 billion).
The agreement includes $600 million in cash, an estimated $1.2 billion for hydrocarbon inventories and a $700 million six-year earn out arrangement based on future margins and refinery throughput.
In addition to the 475,000 barrel per day refinery, Marathon Petroleum will also acquire connected natural gas liquid pipelines and four marketing terminals in the Southeast US. BP anticipates the transaction, subject to regulatory and other approvals, will close early next year.
Describing the sale as 'the second major milestone in the strategic refocusing of our US fuels business', Iain Conn, CEO of BP's global refining and marketing business, says: 'Together with the sale of our Carson, California refinery, announced in August, the divestment of Texas City will allow us to focus on BP's US fuels investments on our three northern refineries, which are crude feedstock advantaged, and their associated marketing businesses.'
BP has raised over $35 billion since the beginning of 2010 through asset divestment and expects this to reach $38 billion by the end of next year. BP says it decision to divest the Carson and Texas City refineries are 'part of a major strategic refocusing of the company's global refining portfolio', while the BBC reports that the funds will be used to pay for the 2010 Deepwater Horizon oil spill.
BP still owns around 8,000 BP and Arco-branded sites across the Midwest, Pacific Northwest and along the East Coast, and in a statement said it will 'remain a significant retailer of fuels' in the US. 'This sale will reduce BP's presence in the Southeast US, however BP remains firmly committed to growing and strengthening our BP-branded retail network and the value of the BP brand east of the Rockies in partnership with BP-branded jobbers and dealers,' says Doug Sparkman, president of the company's East of the Rockies fuels business.