BP has completed the previously announced sale of its Texas City, Texas refinery and a portion of its retail and logistics network in the Southeast U.S. to Marathon Petroleum Corporation for an estimated $2.4 billion.
This comprises approximately $0.6 billion in cash, $1.1 billion for the estimated value of hydrocarbon inventory and an earn-out arrangement payable over six years of $0.7 billion (based on assumed future margins and refinery throughput).
“The completion of this divestment is a major milestone in the refocusing of our U.S. fuels portfolio,” said Iain Conn, chief executive of BP’s global refining and marketing business. “Together with the sale of our Carson, California refinery, which we also expect to close this year, the divestment of Texas City allows us to focus BP’s U.S. fuels investments on our three northern refineries, which are crude feedstock advantaged, and their associated marketing businesses.”
“The teams running the Texas City refinery and related marketing assets have made remarkable progress in both safety and reliability and they should feel very proud of these accomplishments,” said Conn. “This is once again a valuable business with a firm future. As it moves to Marathon Petroleum, the refinery and its employees have a strong platform from which to continue this journey and build on their many achievements.”
With today’s closing, Marathon Petroleum takes ownership of the 475,000 barrel per day refinery, associated cogeneration plant and natural gas liquids pipelines, and four marketing terminals in the Southeast U.S. BP has also assigned certain branded jobber contracts supplying approximately 1,200 retail sites in Tennessee, Mississippi, Alabama and Florida.
BP remains 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. The company continues to market in the Southeast U.S. through more than 100 jobbers and approximately 2,400 branded retail outlets which were not part of the Marathon Petroleum transaction. “Our continued drive to be the preferred fuels brand in our U.S. markets remains unchanged,” said Doug Sparkman, president of BP’s East of Rockies fuels business. ”BP remains firmly committed to growing and strengthening the BP-branded retail network and the value of the BP brand in partnership with our BP-branded jobbers and dealers.”