ENERGY giant BP announced on Monday it has agreed to sell its global petrochemical business to INEOS, a UK chemicals company, for US$5 billion.
The sale, BP said in a release, is the “next strategic step in reinventing BP, will further strengthen BP’s balance sheet and delivers its target for agreed divestments a year earlier than originally scheduled.”
The sale will include BP’s 36.9 per cent interest in the Atlas Methanol plant in Point Lisas.
The majority owner of Atlas is Canadian petrochemicals giant Methanex (63.1 per cent), which in March announced it was shuttering Atlas’ sister plant, Titan, because of dampened international commodity markets and prices, exacerbated by the covid19 pandemic and global lockdown.
Under the terms of the agreement, INEOS will pay BP a deposit of US$400 million and a further US$3.6 billion on completion.
An additional US$1 billion will be deferred and paid in three separate instalments of US$100 million in March, April and May 2021, with the remaining US$700 million payable by the end of June 2021.
Subject to regulatory and other approvals, the transaction is expected to be complete by the end of 2020.