BP agrees to sell its petrochemicals business to INEOS
Bp has announced it has sold its global petrochemicals business to INEOS as part of its strategy to reinvent the company.
BP has announced it has sold its global petrochemicals business to INEOS as part of its strategy to reinvent the company.
Selling its global petrochemicals business to INEOS will help bp strengthen its balance sheet and deliver its target for agreed divestments a year earlier than originally scheduled.
Bernard Looney, chief executive officer of BP said that the agreement “is another deliberate step in building a BP that can compete and succeed through the energy transition.”
A leading global chemicals company, INEOS has a network spanning over 180 sites in 26 countries, employing roughly 22,000 staff worldwide.
This is not the first time INEOS has acquired a business from BP. Over the past two decades a number of businesses from BP have been acquired, including the 2005 $9 billion purchase of Innovene, the bp subsidiary that comprised the majority of bp’s then chemicals assets and two refineries.
“Strategically, the overlap with the rest of bp is limited and it would take considerable capital for us to grow these businesses,” said Looney. “As we work to build a more focused, more integrated bp, we have other opportunities that are more aligned with our future direction. This agreement is another deliberate step in building a bp that can compete and succeed through the energy transition.”
BPs petrochemicals business is focused on two main businesses – aromatics and acetyls – each of which has leading technology and advantaged manufacturing plants. In total, the businesses have interests in 14 manufacturing plants in Asia, Europe and the US, and in 2019 produced 9.7 million tonnes of petrochemicals.
BP’s acetyls business produces acetic acid and derivatives such as acetic anhydride which are used in multiple sectors, with manufacturing plants in China, Korea, Malaysia, Taiwan, the UK and the US.
The aromatics business is a global leader in the production of purified terephthalic acid (PTA), a key feedstock for the manufacture of polyester plastics, and its precursor paraxylene (PX). The largest manufacturing plants are in China, Belgium and the US. The business also licenses its leading PTA production technology to producers around the world.
The sale also includes related interests such as the chemical recycling technology bp Infinia and bp’s interest in acetylated wood developer Tricoya.
Combined, the acetyls and aromatics businesses currently employ over 1,700 staff worldwide, and are expected to transfer to INEOS on completion of the sale.
Brian Gilvary, bp’s chief financial officer, said that with this agreement, bp has “met our $15 billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us.” The amount was originally expected to be reached by mid-2021.
Gilvary, who led the negotiation with the owners of INEOS, added: “bp has had a long relationship with INEOS and this agreement reflects the mutual respect and trust that exists between us. It is a strategic deal for both parties that recognises both the high quality of the businesses and that INEOS is in many ways a natural owner for them.”