BP sells Texas City refinery in £1.6bn deal

OIL major BP moved to draw a line under one of the most tragic episodes in its history yesterday when it struck a deal to sell its Texas City refinery for up to $2.5 billion (£1.6bn) to American energy group Marathon Petroleum.

Marathon is to buy the 451,000 barrel-per-day refinery, one of the biggest in the US, as well as the plant’s inventory, three intra-state gas pipelines and other assets.

The Texas City refinery was the site of the 2005 explosion that killed 15 workers and injured 180. The disaster triggered a $13m fine by US regulators for BP to settle safety violations at the refinery.

The base purchase price is $598m, plus inventories estimated at $1.2bn, Marathon said. The agreement also has a provision under which the American company could pay BP up to $700m more over six years.

BP has been selling off assets to help pay damages for the Gulf of Mexico oil spill and environmental disaster in 2010, where 11 workers were killed after the company’s Macondo well exploded.

The disaster led to the ousting of BP chief executive Tony Hayward, who was replaced by Bob Dudley, an American BP veteran who once ran the group’s Russian joint venture TNK-BP.

City oil analysts said yesterday that the British group has also been focusing more on its northern US refineries with better access to cheap Canadian oil supplies.

Marathon’s stock rose nearly 9 per cent to $59.62 in early trading on the New York Stock Exchange after the announcement.