BP PLC (BP.) - BP TO SELL TEXAS CITY REFINERY TO MPC
RNS Number : 1770O
08 October 2012
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
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
"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
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
· 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
· 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
· 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.).
BP Press Office, U.S.: +1 281 366 4463, firstname.lastname@example.org
BP Press Office, London: +44 (0)20 7496 4076, email@example.com
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
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
DISFSUFEAFESEIS -0- Oct/08/2012 13:00 GMT
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