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BP to sell its petrochemical business to Ineos
BP is to sell its global petrochemicals business to Ineos for a total consideration of $5bn as part of the company’s ‘reinvention’ process and to further strengthen its balance sheet and deliver its target for some $15bn of divestments a year earlier than originally scheduled.
BP’s petrochemicals business is focused on two main businesses – aromatics and acetyls – which have interests in 14 manufacturing plants in Asia, Europe and the US and, in 2019, produced 9.7mn tonnes of petrochemicals.
Commenting on the news, Steve Jenkins, Vice President of Wood Mackenzie’s petrochemicals team, says: ‘While most of the oil majors and NOCs [national oil companies] are focusing on strengthening their petrochemical integration, BP has divested the last of its standalone petrochemical assets. This ends a slow exit from the sector that began in 2005. Most of BP's chemicals business was divested to Ineos at that time, along with two major integrated refinery/chemicals sites. Aside from the remaining deeply integrated Gelsenkirchen site, BP has now exited the chemicals business. This is a significant move, signalling its switch to focus on new energies.’
He continues: ‘Ineos is, no doubt, relying upon capturing significant operational synergies as it integrates the two businesses. The deal includes a number of co-located assets and represents a good overall portfolio fit with very limited overlap.’
Photo: BP
News Item details
Journal title: Petroleum Review
Subjects: Economics, business and commerce, Petrochemicals, Business management