BP, the largest oil and natural-gas producer in the U.S., today said it plans to sell refineries in Texas City, Texas, and Carson, California, to focus on plants that can process heavy crude and raise diesel output. The company is also selling retail assets in southern California, Arizona and Nevada.
“These are not average refineries, these are some of the most highly upgraded in the world,” Iain Conn, BP’s head of refining and marketing, told reporters in London. “We would expect to get a value above the benchmarks.”
Chief Executive Officer Robert Dudley is making the company “more agile” following the worst oil spill in U.S. history. BP has so far sold $22 billion in assets as part of a plan to divest $30 billion to help pay for the damage.
Conn estimated that U.S. refining assets have in the past 10 years been sold at an average of about $6,000 per unit of capacity, valuing the plants at about $4.4 billion. The company will sell distribution terminals, power generators and infrastructure, potentially raising the value of the deal.
The company expects to complete the sale of the refineries along with marketing assets by the end of 2012, BP said. The Texas City refinery can handle 475,000 barrels of oil daily while Carson has a daily processing capacity of 266,000 barrels, according to data compiled by Bloomberg.
BP will become the smallest refiner “of the traditional supermajors,” Dudley said today. The company has invested about $1 billion to repair and upgrade the plant in Texas City since an explosion in March 2005 killed 15 people and injured more than 170. It’s the third-largest refinery in the U.S.
“We had a number of interested parties talk to us about Texas City,” Conn said, declining to name any companies.
BP has not had talks with any bidders on the Carson refinery, which will be sold with the Arco retail chain in Los Angeles. “We expect quite a lot interest in it,” Conn said.
It plans to focus on refining and marketing networks in the country based around the Whiting, Indiana, and Cherry Point, Washington, refineries and its 50 percent share in the Toledo, Ohio, plant. They have “greater flexibility to refine a range of crude oils including heavy grades, and on average are more diesel-capable than BP’s current portfolio,” the company said.
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