Source: flickr.com; (CC BY 2.0)
BP will be selling its “global petrochemicals business” as Ineos owned by Jim Ratcliffe will buy the same for “$5 billion”. The move to pull out of a sector has been associated with a key driving factor of “oil demand growth” in the future. This seems to come as a surprise while it also means that the former has met with “$15 billion asset sales target” one year prior to its scheduled time.
Likewise, the company is preparing to transit into “lao-carbon energy”. According to Reuters:
“Progress towards the sales target had taken a dent after BP had to renegotiate terms of its sale of two oil and gas portfolios in Alaska and the North Sea in recent months in light of the unprecedented demand slump triggered by the COVID-19 pandemic”.
However, Looney has acknowledged that the sale details “will come as a surprise” as he stated:
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these (petrochemical) businesses”.
“Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”
Reuters further added:
“The business includes stakes in manufacturing plants in the United States, Trinidad and Tobago, Britain, Belgium, China, Malaysia and Indonesia. The petrochemical plant attached to BP’s oil refineries in Gelsenkirchen and Mulheim in Germany are not included”.
On the other hand, the IEA, or the International Energy Agency’s report in 2018 suggested that various petrochemical products along with plastics will be driving oil demands to 2050 while offsetting the “slower consumption of motor fuel”.
The more and more consumers are voicing their concerns over chemicals polluting the oceans, likewise BP can’t bet on these sectors for a long-term while is focusing to improve its “green credentials”. While, the chairman of Ineos, Ratcliffe said:
“This acquisition is a logical development of our existing petrochemicals business, extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry”.
References:
reuters.com
Likewise, the company is preparing to transit into “lao-carbon energy”. According to Reuters:
“Progress towards the sales target had taken a dent after BP had to renegotiate terms of its sale of two oil and gas portfolios in Alaska and the North Sea in recent months in light of the unprecedented demand slump triggered by the COVID-19 pandemic”.
However, Looney has acknowledged that the sale details “will come as a surprise” as he stated:
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these (petrochemical) businesses”.
“Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”
Reuters further added:
“The business includes stakes in manufacturing plants in the United States, Trinidad and Tobago, Britain, Belgium, China, Malaysia and Indonesia. The petrochemical plant attached to BP’s oil refineries in Gelsenkirchen and Mulheim in Germany are not included”.
On the other hand, the IEA, or the International Energy Agency’s report in 2018 suggested that various petrochemical products along with plastics will be driving oil demands to 2050 while offsetting the “slower consumption of motor fuel”.
The more and more consumers are voicing their concerns over chemicals polluting the oceans, likewise BP can’t bet on these sectors for a long-term while is focusing to improve its “green credentials”. While, the chairman of Ineos, Ratcliffe said:
“This acquisition is a logical development of our existing petrochemicals business, extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry”.
References:
reuters.com
