BP has agreed to sell its global petrochemicals business to INEOS for $5 billion (£4.05bn).
The sale is expected to deliver the energy giant’s target for agreed divestments a year earlier than originally scheduled and is hoped to further strengthen BP’s balance sheet.
The petrochemicals business is focused on two main businesses, aromatics and acetyls – in 2019, the firm produced a total of 9.7 million tonnes of petrochemicals.
Bernard Looney, BP CEO said: “This is another significant step as we steadily work to reinvent BP. 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.
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”
Subject to regulatory and other approvals, the transaction is expected to complete by the end of 2020.