The British energy giant
) aims to sell its Texas City refinery to Ohio-based
Marathon Petroleum Corp.
), according to a report by The Financial Times. This move is
integral to BP's efforts to shed its properties to cover the 2010
Deepwater Horizon oil spill cost.
Although BP and Marathon declined to comment on this specific
transaction, BP pointed out that it remains on track for a
potential sale of its Texas City refinery by the end of the year.
The sale of this refinery, the third largest in the U.S., could
fetch up to $2.5 billion (1.9 billion euros) for BP.
Even before the Macondo accident, this 475,000 barrel a day
facility witnessed a deadly explosion in March 2005. The incident
took the lives of 15 workers and injured as many as 170, raising a
safety alarm across BP's U.S. operations. Following this, the
company shut down the refinery for about two years and incurred $1
billion on compensations to restore the unit. Again in 2007, BP
announced it spent $1.6 billion to recompense the sufferers.
In recent times, BP has divested a number of non-strategic assets
that include Gulf of Mexico (GoM) oil and gas assets to
Plains Exploration & Production Co.
) for $5.55 billion as well as its Canadian natural gas liquids
business to Houston's
Plains All American Pipeline L.P.
) for $1.67 billion. Recently, it has also disposed the Carson
refinery in California to
) for $2.25 billion. However, the company intends to retain three
core U.S. sites, Whiting in Indiana, Cherry Point in Washington and
Toledo in Ohio.
These negotiations are in line with BP's divestment program that
sees the British major getting rid of its mature, non-core upstream
assets to create a portfolio with strong growth potential operating
from a smaller base. The company is set to divest around $38
billion worth of assets by 2013, of which it has already announced
disposals of $33 billion.
BP carries a Zacks #3 Rank, which is equivalent to a Hold rating
for a period of one to three months. We also maintain our long-term
Neutral recommendation on the company.
BP PLC (BP): Free Stock Analysis Report
MARATHON PETROL (MPC): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
PLAINS EXPL&PRD (PXP): Free Stock Analysis
TESORO CORP (TSO): Free Stock Analysis Report
To read this article on Zacks.com click here.