SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the
period ended 29 June,
2020
BP p.l.c.
(Translation
of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.
Form
20-F |X| Form 40-F
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Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of
1934.
Yes No
|X|
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press
release
29 June 2020
bp agrees to sell its petrochemicals business to INEOS
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$5 billion deal for bp's global aromatics, acetyls and related
businesses
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Next strategic step in focusing portfolio as part of reinventing
bp
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Further strengthens bp's finances, delivers $15 billion divestment
target a year early
bp today announced that it has agreed to sell its global
petrochemicals business to INEOS for a total consideration of $5
billion, subject to customary adjustments. The agreed sale, 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.
Under the terms of the agreement, INEOS will pay bp a deposit of
$400 million and will pay a further $3.6 billion on completion. An
additional $1 billion will be deferred and paid in three separate
instalments of $100 million in March, April and May 2021 with the
remaining $700 million payable by the end of June 2021. Subject to
regulatory and other approvals, the transaction is expected to
complete by the end of 2020.
bp's petrochemicals business is focused on two main businesses -
aromatics and acetyls - each of which has leading technology and
advantaged manufacturing plants, including a strong presence in
growth markets in Asia. In total, the businesses have interests in
14 manufacturing plants in Asia, Europe and the US and in 2019
produced 9.7 million tonnes of petrochemicals.
Bernard Looney, bp chief executive officer 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. In recent years they have
improved performance to produce highly competitive returns and now
have the potential for growth and expansion into the circular
economy.
"I am very grateful to our petrochemicals team for what they have
achieved over the years and their commitment to bp. I recognise
this decision will come as a surprise and we will do our best to
minimise uncertainty. I am confident however that the businesses
will thrive as part of INEOS, a global leader in
petrochemicals.
"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.
Today's agreement is another deliberate step in building a bp that
can compete and succeed through the energy
transition."
INEOS is a leading global chemicals company with a network spanning
over 180 sites in 26 countries, employing some 22,000 staff
worldwide. Over the past two decades, INEOS has acquired a number
of businesses from bp, most notably the 2005 $9 billion purchase of
Innovene, the bp subsidiary that comprised the majority of bp's
then chemicals assets and two refineries.
Brian Gilvary, bp's chief financial officer, said: "With today's
announcement we have met our $15 billion target for agreed
divestments a full year ahead of schedule, demonstrating the range
and quality of options available to us."
Gilvary, who led the negotiation with the owners of INEOS, added:
"bp has had a long relationship with INEOS and this agreement
reflects the mutual respect and trust that exists between us. It is
a strategic deal for both parties that recognises both the high
quality of the businesses and that INEOS is in many ways a natural
owner for them."
bp's aromatics business is a global leader in the production of
purified terephthalic acid (PTA), a key feedstock for the
manufacture of polyester plastics, and its precursor paraxylene
(PX). The business's largest manufacturing plants are in China, the
US and Belgium and it licenses its leading PTA production
technology to producers around the world.
The acetyls business produces acetic acid and derivatives such as
acetic anhydride, which have uses in a wide range of sectors. It
has a diverse base with manufacturing plants in the US, the UK,
China, Korea, Taiwan and Malaysia. The sale will also include
related interests such as the chemical recycling technology bp
Infinia and bp's interest in acetylated wood developer
Tricoya.
In total, the businesses included in the transaction currently
employ over 1,700 staff worldwide. These staff are expected to
transfer to INEOS on completion of the sale.
This agreement means that bp has now agreed $15 billion of
divestments and other disposals through 2019 and 2020 to date, an
amount originally expected to be reached by mid-2021.
bp expects to report its second quarter 2020 results on 4 August
and to hold a capital markets day to set out details of its new
strategic direction in mid-September.
Notes:
●
The
sale agreement includes the whole of bp's aromatic and acetyls
businesses, including assets, technology and licences, as well as
related assets.
●
Manufacturing
plants, and their primary products, included in the
sale:
Americas: Cooper
River, South Carolina (PTA - bp 100%); Texas City, Texas (PX and
metaxylene - bp 100%); Eastman bp Texas City Production Agreement
(acetic acid); Atlas Methanol, Point Lisas, Trinidad & Tobago
(methanol - bp 36.9%).
Europe: Hull, UK (acetic acid, acetic anhydride - bp
100%); Geel, Belgium (PTA, PX - bp 100%).
Asia: Zhuhai, China (PTA - bp 91.9%), Chongqing,
China (acetic acid, acetate esters - bp 51%); Nanjing, China
(acetic acid - bp 50%); Merak, Indonesia, (PTA - bp 100%); Kertih,
Malaysia (acetic acid - bp 70%); Ulsan, South Korea (acetic acid
and vinyl acetate monomer - bp ~50.9%); Taichung, Taiwan (PTA - bp
61.4%); Mai Liao, Taiwan (acetic acid - bp
50%).
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bp's
petrochemicals assets at Gelsenkirchen and Mulheim in Germany are
highly integrated with bp's Gelsenkirchen refinery and are not
included in the sale.
●
In
connection with this transaction, INEOS has an option to
acquire from bp the research complex located at Naperville,
Illinois, for an additional consideration or to enter into a lease
or other arrangement for the same.
●
This
transaction constitutes a Class 2 transaction for bp under the UK
Listing Rules.
●
The
gross assets that are the subject of this transaction amounted to
$3,496 million as at 31 December 2019. For the year ended 31
December 2019, a replacement cost profit before interest and tax of
$396 million arose in relation to these assets (see page 57 of bp's
Annual Report and Form 20-F 2019).
●
Proceeds
from the sale will be used by bp for general corporate
purposes.
Further
information:
bp press office London, bppress@bp.com,
+44 7831 095541, +44 7554 114451
Cautionary
statement:
In order to utilize the 'safe harbor' provisions of the United
States Private Securities Litigation Reform Act of 1995 (the
'PSLRA'), bp is providing the following cautionary statement. This
press release contains certain forward-looking statements - that
is, statements related to future, not past events and circumstances
- which may relate to one or more of the financial conditions,
results of operations and businesses of bp and certain of the plans
and objectives of bp with respect to these items. These statements
are generally, but not always, identified by the use of words such
as 'will', 'expects', 'is expected to', 'aims', 'should', 'may',
'objective', 'is likely to', 'intends', 'believes', 'anticipates',
'plans', 'we see' or similar expressions. In particular, among
other statements, expectations regarding the completion of the sale
of bp's global petrochemicals business to Ineos and the amount and
timing of receipt of sale proceeds; expectations regarding the
transfer of staff; expectations regarding the completion of
previously announced divestments and other disposals; expectations
regarding the date on which bp's second-quarter 2020 results will
be released; expectations and plans to hold a capital markets day
in mid-September; and expectations regarding bp's use of the
proceeds of sale. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will or may occur in the future and
are outside the control of bp. Actual results may differ from
those expressed in such statements, depending on a variety of
factors including the extent and duration of the impact of the
current market conditions including the significant drop in the oil
price, overall global economic and business conditions impacting
our business and demand for our products, as well as the risk
factors set forth in our most recent Annual Report and Form 20-F
under "Risk factors" and in any of our more recent public
reports.
Our most recent Annual Report and Form 20-F and other period
filings are available on our website at www.bp.com or can be
obtained from the SEC by calling 1-800-SEC-0330 or on its website
at www.sec.gov
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BP
p.l.c.
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(Registrant)
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Dated: 29
June 2020
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/s/ Ben
J. S. Mathews
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Ben J.
S. Mathews
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Company
Secretary
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