BP announced today that it is looking to sell two of its US
refineries. The company has officially put a for
sale sign in front of its refineries in Texas City,
Texas, and Carson, California. BP is also seeking a buyer
(perhaps the same one) for its associated integrated marketing
businesses in southern California, Arizona, and Nevada. BP
plans to complete the sales by the end of 2012, and this
liquidation of assets would cut in half BPs US refining
BP plans to focus future downstream investment in the US on
further improving and upgrading its other refining and marketing networks in
the country, based around the Whiting, Indiana, and Cherry Point,
Washington, refineries and its 50% interest in the Toledo, Ohio
refinery. So in essence, the
company is less interested in the sun-baked climates of the
American Southwest and more compatible with a Midwestern
vibe. According to BP, these refineries have greater
flexibility to refine a range of crude oils including heavy
grades, and on average are more diesel-capable than BPs
current portfolio. They are also well-integrated with BPs
marketing operations and benefit from advantaged and focused
BP plans to sell both the Texas City refinery and the Carson
refinery with its marketing network as going concerns and
expects significant market interest in the assets. The planned
sales will be subject to regulatory and other approvals, and BP
will ensure that fulfillment of the current regulatory
obligations associated with Texas City are reflected in any
"The US remains a very important market for BP's fuels,
lubricants and petrochemicals businesses and the
moves we have announced today will give BP a smaller, but
well-positioned and very competitive portfolio of refining and marketing businesses,"
said Iain Conn, BP chief executive refining and marketing. "I
have no doubt that the businesses we are seeking to divest will
prove extremely attractive to other operators."
The Carson refinery, south of Los Angeles, is at the heart
of an integrated fuels value chain stretching across southern
California, Arizona and Nevada. The refinery, which has 265,000 bpd
capacity and supplies around 25% of Los Angeles gasoline
demand, became part of BP through the 2000 acquisition of ARCO.
It employs some 1,200 staff and 500 contractors.
The assets associated with the Carson refinery also to be
divested include BP's interests in a cogeneration plant on the
refinery site, crude and product terminals and also its
marketing interests. As part of this sale, BP expects to divest
the ARCO brand (though retaining brand rights for northern
California, Oregon and Washington) and to retain ownership of
and license the ampm brand.
The Texas City refinery became part of BP with the 1998 merger
with Amoco. It is a large, highly complex refinery with 475,000
bpd refining capacity the third
biggest refinery in the US, with gasoline manufacturing
capability equivalent to approximately 3% of US production. The
refinery employs some 2,200 BP staff.
During the last few years, over $1 billion has been invested in
modernizing and improving the plant. Much of that
investment was driven by the requirements of federal regulators
after the March 2005 fire and explosion at the refinery killed
15 workers and injured more than 170 others.
Investigation of the accident revealed BP was to blame for
subpar maintenance and safety procedures at
According to BP, they are looking to sell Texas City because
it lacks strong integration into any BP marketing
assets. The assets to be divested associated with the sale of
Texas City also include the cogeneration plant. BP intends to
retain the Texas City chemicals complex adjoining the refinery.