BP sells petrochemical arm to Ineos for $5 billion

British energy group BP, hit hard by the coronavirus pandemic slashing demand for oil, announced Monday the sale of its petrochemical business to rival Ineos for $5.0 billion (€4.4 billion).

 

"The agreed sale... will further strengthen BP's balance sheet and delivers its target for agreed divestments a year earlier than originally scheduled," a statement said.

BP chief executive Bernard Looney added:

"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."

BP said that 1,700 staff employed by its petrochemical business worldwide were expected to transfer to Ineos on completion of the sale that meets a $15-billion divestment target one year early.

"Today's agreement is another deliberate step in building a BP that can compete and succeed through the energy transition," Looney added.

The Irish national, who became CEO of BP in February, is targeting "net zero" carbon emissions for the company by 2050.

In the immediate future, BP must rebuild its finances, having said earlier this month that it would take a hit of up to $17.5 billion in the second quarter.

With the coronavirus fallout ravaging global oil demand, BP has decided also to axe around 10,000 jobs, or 15 percent of its global workforce.

After companies worldwide closed their doors and airlines grounded planes at the height of the COVID-19 outbreak towards the end of the first quarter, oil prices dropped off a cliff, causing them to briefly turn negative.

Prices have however rebounded sharply in recent weeks as governments ease lockdowns and businesses slowly reopen.

Similar articles

  • UK, 6 EU countries stop fossil fuel exports funding

    UK, 6 EU countries stop fossil fuel exports funding

    UK and six EU countries vowed to stop providing guarantees, related to all projects linked to exports of fossil fuels, Reuters reported. The initiative includes Britain, Germany, France, The Netherlands, Denmark and Sweden. Official representatives of governments in London, Paris and Berlin are expected to seal formally the pact on Wednesday, French Finance Minister Bruno Le Maire said. The intended deal includes halt of all public export guarantees.

    61
  • Siemens eyes a slice of massive US budget cake

    Siemens eyes a slice of massive US budget cake

    The German engineering conglomerate Siemens has expressed expectations to receive some of the funds, envisaged for economic revival by US President Joe Biden, Reuters reported. Biden had announced generous plans to address the economic slowdown, caused by the pandemic by targeting massive funds to infrastructure restoration and development. The infrastructure spending is seen reaching as high as $2.3 trillion.

    56
  • Shell sees a fall in Q1 fuel sales

    Shell sees a fall in Q1 fuel sales

    Royal Dutch Shell announced it expected a significant drop in fuel sales in the first quarter of 2021, Reuters reported. The world’s biggest fuel retailer expects a very slow recovery of the markets undermined by Covid-19 lockdowns in major industrial countries. In a trading update, Shell said it saw refined oil product sales at 3.7-4.7 million barrels per day (bpd) for the first quarter of 2021, compared with just under 4.8 million bpd in the last quarter of 2020. It had previously forecast sales of 4-5 million bpd.

    54