BP sells petrochemical arm to Ineos for $5 billion

British energy group BP, hit hard by the coronavirus pandemic slashing demand for oil, yesterday announced the sale of its petrochemical business to rival Ineos for US$5 billion.

“The agreed sale... will further strengthen BP’s balance sheet and delivers its target for agreed divestments a year earlier than originally scheduled,” a statement said.

BP Chief Executive Bernard Looney said: “I recognize this decision will come as a surprise and we will do our best to minimize uncertainty. I am confident however that the businesses will thrive as part of Ineos, a global leader in petrochemicals.”

BP said that 1,700 staff employed by its petrochemical business worldwide were expected to transfer to Ineos on completion of the sale that meets a US$15-billion divestment target one year early.

In the immediate future, BP must rebuild its finances, having said earlier this month it would take a hit of up to US$17.5 billion in the second quarter.