|Photo Courtesy of BP p.l.c.|
BP has reached an agreement to sell its Texas City, Texas refinery and a portion of its retail and logistics network in the U.S Southeast to Marathon Petroleum Corporation for $2.5 billion.
Together with the sale of BP’s Carson, Calif. refinery, announced in August, the divestment of Texas City will allow BP to focus its U.S. fuels investments on the company’s three northern refineries, which are crude feedstock advantaged, and their associated marketing businesses, according to Iain Conn, chief executive of BP’s global refining and marketing business, in a prepared statement.
Although largely a merchant refinery, Conn said BP has decided to also sell certain terminals and marketing assets in the Southeast U.S.
With the agreement reached on Oct. 8, the total value of the divestments that BP has agreed since the beginning of 2010 is now over $35 billion. BP says it 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. 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 says it 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 says it 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,” Doug Sparkman, president of BP’s East of Rockies fuels business, said in a prepared statement. “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.”