By RAZAK MUSAH BABA
LONDON -- Oil major BP on Monday announced an agreement to sell its refinery in Texas City, Texas, and a portion of its retail and logistics network in the southeast US to Marathon Petroleum for $2.5 billion.
The sale amount includes $600 million of cash at closing, an estimated value of $1.2 billion for hydrocarbon inventories and a $700 million six-year earn-out arrangement based on future margins and refinery throughput.
With Monday's agreement, the total value of the divestments that BP has agreed since the beginning of 2010 is more than $35 billion. BP 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 bpd refinery, associated natural gas liquids pipelines and four marketing terminals in the southeast US.
BP will also assign certain branded jobber contracts supplying 1,200 retail sites in Tennessee, Mississippi, Alabama and Florida that could be supplied by the refinery.
BP will remain a significant retailer of fuels in the US, with 8,000 BP and ARCO-branded sites in the Midwest, Pacific Northwest and along the East Coast. BP anticipates the transaction will close by early 2013.
BP continues to invest heavily in its three northern US refineries.
Dow Jones Newswires