BP to shed two U.S. refineries (2/3)
February 3, 2011
In a move that will sharply reduce BP’s U.S. refining capacity, the company announced recently that it plans to sell its Texas City, Texas and Los Angeles area refineries, along with its associated integrated marketing business in southern California, Arizona and Nevada.
A BP press release says the sales are part of a corporate realignment due to changing trends in global oil demand and that the company intends to reposition its refining and marketing (R&M) business in the U.S. No mention was made of the 2005 explosion at the Texas City refinery which killed 15 workers.
“BP plans to focus future downstream investment in the US on further improving and upgrading its other, more advantaged R&M networks in the country – based around the Whiting, Indiana and Cherry Point, Washington refineries and its 50 per cent interest in the Toledo, Ohio refinery,” according to the statement. “These refineries have greater flexibility to refine a range of crude oils including heavy grades, and on average are more diesel-capable than BP’s current portfolio. They are also well-integrated with BP’s marketing operations and benefit from advantaged and focussed logistics infrastructure.
Depending upon regulatory approvals, BP is hoping to close the sales by the end of 2012.
"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 barrels per day (bpd) refining capacity and supplies some 25 per cent of Los Angeles gasoline demand, became part of BP through the 2000 acquisition of ARCO. It employs some 1200 staff and 500 contractors.