BP to sell its petrochemicals business to INEOS
BP has announced that it has agreed to sell its global petrochemicals business to UK chemical company INEOS for a total consideration of US$5 billion. The company says the sale will “further strengthen BP’s balance sheet and delivers its target for agreed divestments a year earlier than originally scheduled”.
Bernard Looney, CEO of BP, said that the agreement “is another deliberate step in building a BP that can compete and succeed through the energy transition”.
BP’s petrochemicals business is focused on two main businesses — aromatics and acetyls — each of which has leading technology and advantaged manufacturing plants, including a strong presence in growth markets in Asia. 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.
“This is another significant step as we steadily work to reinvent BP,” said Looney. “These businesses are leaders in their sectors, with world-class technologies, plants and people. In recent years they have improved performance to produce highly competitive returns and now have the potential for growth and expansion into the circular economy.
“I am very grateful to our petrochemicals team for what they have achieved over the years and their commitment to BP. I recognise this decision will come as a surprise and we will do our best to minimise uncertainty. I am confident however that the businesses will thrive as part of INEOS, a global leader in petrochemicals.”
INEOS is a global chemicals company with a network spanning over 180 sites in 26 countries, employing some 22,000 staff worldwide. Over the past two decades, INEOS has acquired a number of businesses from BP, most notably the 2005 US$9 billion purchase of Innovene, the BP subsidiary that comprised the majority of BP’s then chemicals assets and two refineries.
BP says its 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 business’s largest manufacturing plants are in China, the US and Belgium and it licenses its leading PTA production technology to producers around the world.
The acetyls business produces acetic acid and derivatives such as acetic anhydride, which have uses in a wide range of sectors. It has a diverse base with manufacturing plants in the US, the UK, China, Korea, Taiwan and Malaysia.
In total, the businesses included in the transaction currently employ over 1700 staff worldwide in a total of 16 plants — six in the Americas, two in Europe and eight in Asia. These staff are expected to transfer to INEOS on completion of the sale.
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