Mubasher: BP, the London-based international oil company, has approved selling its global petrochemicals business to INEOS, one of the world's largest chemical producers, at a total price of $5 billion.
This decision aims to boost BP's balance sheet and achieve its target to divest from some businesses a year earlier than originally scheduled, according to a press release on Monday.
To realise the transaction, which is forecasted to be completed by the end of 2020, INEOS will pay a $400 million deposit and a further $3.6 billion to complete the purchase.
Meanwhile, an additional $1 billion will be postponed and paid in three separate instalments of $100 million in March, April, and May 2021, while the remaining $700 million will be paid by the end of June 2021.
BP dedicates its petrochemicals business to aromatics and acetyls businesses that have leading technology and manufacturing plants and interests in 14 manufacturing plants in Asia, Europe, and the US.
In 2019, these businesses, which are popular in Asia's growth markets, have produced 9.7 million tonnes of petrochemicals.
BP CEO, Bernard Looney, said: "This is another significant step as we steadily work to reinvent bp. These businesses are leaders in their sectors, with world-class technologies, plants, and people."
"Strategically, the overlap with the rest of bp is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated bp, we have other opportunities that are more aligned with our future direction," Looney added.