BP PLC BP. BP TO SELL TEXAS CITY REFINERY TO MPC

  BP PLC (BP.) - BP TO SELL TEXAS CITY REFINERY TO MPC

RNS Number : 1770O
BP PLC
08 October 2012




press release





8 October, 2012



                  BP AGREES TO SELL TEXAS CITY REFINERY TO

               MARATHON PETROLEUM CORPORATION FOR $2.5 BILLION,

                 MARKING SECOND MAJOR MILESTONE IN STRATEGIC

                     REFOCUS OF U.S. DOWNSTREAM BUSINESS

                                      

  Refinery and portion of Southeast U.S. retail and logistics network to be
  sold; BP has now announced over $35 billion toward its goal of $38 billion
                                 divestments

                                      

BP announced today it has reached an  agreement to sell its Texas City,  Texas 
refinery and a portion  of its retail and  logistics network in the  Southeast 
U.S. to Marathon Petroleum Corporation for $2.5 billion (which 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).



"Today's  announcement  is  the  second  major  milestone  in  the   strategic 
refocusing of our  U.S. fuels business,"  said Iain Conn,  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  U.S. fuels  investments on  our three  northern 
refineries,  which  are  crude  feedstock  advantaged,  and  their  associated 
marketing businesses. Marathon  Petroleum is  a highly  respected refiner  and 
marketer. Their ability  to take  on the  responsibilities of  this large  and 
complex refinery will be good for the long-term future of the business and its
employees. Although largely a merchant refinery, we have decided to also  sell 
certain terminals and marketing assets in the Southeast U.S."



With today's agreement the total value  of the divestments that BP has  agreed 
since the beginning of 2010 is now over $35 billion. BP expects this total  to 
reach $38 billion by the end of 2013.



Subject to regulatory  and other approvals,  Marathon Petroleum will  purchase 
the 475,000 barrel per day refinery, associated natural gas liquids pipelines,
and four marketing terminals in the Southeast U.S. BP will also assign certain
branded  jobber  contracts  supplying  approximately  1,200  retail  sites  in 
Tennessee, Mississippi, Alabama  and Florida  which could be  supplied by  the 
refinery. BP will  remain a significant  retailer of fuels  in the U.S.,  with 
approximately  8,000  BP  and  ARCO-branded  sites  in  the  Midwest,  Pacific 
Northwest and along the East Coast. BP anticipates the transaction will  close 
by early 2013.



"This sale will reduce BP's presence in the Southeast U.S., 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," said Doug Sparkman, president of BP's East of
Rockies fuels  business. "A  number of  valued jobbers  are affected  by  this 
transaction and  we  are  committed  to working  very  closely  with  Marathon 
Petroleum to make this transition as smooth as possible."



"During the past several  years the Texas City  Refinery has been  transformed 
through a resolute focus  on safe, compliant, and  reliable operations and  in 
recent months has returned  to profitability. It does  not, however, fit  with 
the long-term strategic  direction of  BP's global  refining portfolio,"  said 
Texas City Refinery manager  Keith Casey. "I  believe today's announcement  is 
good for our workers,  good for our community,  and positions the refinery  to 
achieve its full potential over  the long term as part  of one of the  leading 
refiner-marketers in the U.S."



BP continues to  invest heavily  in its  three northern  U.S. refineries.  The 
company is in the midst of a multi-billion dollar modernization effort at  its 
Whiting Refinery in  Northwest Indiana. The  BP Cherry Point  Refinery in  the 
state of Washington is being  upgraded to produce cleaner-burning diesel  fuel 
and the BP Husky joint venture near  Toledo, Ohio is investing to improve  its 
gasoline making capabilities.



"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  added. "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 U.S."



About BP in the US:



BP has invested more in  the United States over the  last five years than  any 
other oil and  gas company.  With more than  $52 billion  in capital  spending 
between 2007 and 2011, BP invests more in the U.S. than in any other  country. 
The company is the second largest producer of oil and gas in the U.S., a major
oil refiner and a  leader in alternative energy  sources including wind  power 
and biofuels. BP provides enough energy each year to light the entire country.
With 23,000 U.S. employees, BP supports nearly a quarter of a million domestic
jobs through its  business activities. For  more information, view  our BP  in 
America  animation  video  at:  http://www.youtube.com/watch?v=I6n9cZ1xxQw  or 
visit www.bp.com.





Notes to editors:



· BP announced plans  to divest its Carson  and Texas City refineries  in 
February 2011 as part of a major strategic refocusing of the company's  global 
refining portfolio.



· The Texas City  refinery became part  of BP with  the 1998 merger  with 
Amoco. It is a large, highly complex refinery with a nameplate 475,000 barrels
per day of  refining capacity. The  refinery employs some  2,150 BP staff  and 
contractor numbers can vary between 1,000 and 3,000 each day.



· Three natural gas liquids pipelines connecting the Texas City  Refinery 
with local suppliers and customers and  some out-of-service lines in the  Gulf 
Coast area are included in the transaction.



· The  adjacent South  Houston Green  Power cogeneration  facility is  an 
integral part of the power infrastructure  at the refinery and is included  in 
the sale.



· BP will continue to  market in the Southeast  US through more than  100 
retained jobbers  and  approximately 2,400  branded  retail outlets.  BP  will 
continue  to  supply  retained  BP-branded  customers  through  its  logistics 
network,  including  the  four   divested  product  terminals  in   Nashville, 
Tennessee; Jacksonville, Florida; and Selma and Charlotte, North Carolina.



· BP's  Texas City  Chemicals  complex adjacent  to  the refinery  is  an 
independent facility and  has been a  key part of  BP's global  petrochemicals 
portfolio and is  not included  in the  sale. BP's  petrochemicals plant  will 
continue to  have  long-term  commercial  arrangements  with  the  Texas  City 
refinery.



· Subject to applicable consents, BP will transfer 50,000 barrels per day
of its shipper history developed on the Colonial Pipeline.



· BP  is currently  in the  process of  carrying out  a number  of  major 
investments in its other U.S. refineries, including a large investment program
to transform its 413,000 barrels per day capacity Whiting, Indiana refinery; a
clean-diesel upgrading project at  its 234,000 barrels  per day Cherry  Point, 
Washington refinery; and the  addition of a  continuous catalytic reformer  to 
the 160,000 barrels  per day capacity  Toledo, Ohio, refinery  (a 50:50  joint 
venture with partner Husky Energy Inc.).





Further enquiries:



BP Press Office, U.S.: +1 281 366 4463, uspress@bp.com

BP Press Office, London: +44 (0)20 7496 4076, bppress@bp.com





Cautionary Statement:



This release contains certain forward-looking statements, including statements
on the expected timing of disposal of  BP's Texas City refinery and a  portion 
of its Southeast U.S. retail and logistics network and of its Carson  refinery 
and related logistics and marketing assets in the U.S. Southwest; upgrades  of 
its Whiting, Cherry Point and  Toledo refineries; BP's divestment program  and 
other statements which are generally, but not always, identified by the use of
words such as 'want', 'intended  to', 'expected to', and similar  expressions. 
Forward-looking statements involve risks and uncertainties because they depend
on circumstances that  will or  may occur in  the future.  Actual results  may 
differ materially  from those  expressed in  such statements,  depending on  a 
variety of  factors, including  general economic  conditions; the  actions  of 
regulators and other  factors discussed  in BP's Second  Quarter Results  2012 
(SEC File No. 1-06262) as filed with the United States Securities and Exchange
Commission.



                                      

                                   - ENDS -



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


DISFSUFEAFESEIS -0- Oct/08/2012 13:00 GMT
 
Press spacebar to pause and continue. Press esc to stop.