BP to sell Texas City refinery six years after deadly blast

OIL giant BP is to sell the Texas City refinery that exploded in 2005 killing 15 people as it seeks a 50 per cent cut in its American refining and marketing arm.

It will also sell the Carson refinery near Los Angeles, with its associated marketing arm in California, Arizona and Nevada, as BP unveiled a full year loss of $4.9 billion (3.1bn) in 2010.

The group's first annual loss in almost 20 years compared with a $13.9bn profit in 2009, a result of the gigantic Gulf of Mexico oil spill.

Bob Dudley, group chief executive, said the decision to radically cut the US refining operations was caused by not making enough money to meet targets.

However, in the wake of the Gulf uproar, for which BP said it had set aside a provision of $41bn, and the recently announced tie-up with Rosneft to explore the Russian Arctic, Dudley reaffirmed the British group's commitment to the US.

"We have no intention of doing that (quitting that market]. We remain solidly committed to doing business in the US," he said. BP made an unchanged underlying fourth-quarter profit of $4.4bn, and, as expected, restored the dividend at 7 cents. That was half the amount in the same quarter a year ago.

The shareholder payout had been suspended for the previous two quarters following the disastrous Gulf blowout last spring that claimed 11 lives and led to the ousting of Dudley's predecessor, Tony Hayward.

Dudley was relaxed ahead of a court action in London yesterday that saw BP's oligarch partners in Russia's TNK-BP joint venture win an injunction blocking the British group's plan to enter a share swap and explore the Arctic with rival state-owned Rosneft.

He forecast a "reasonable" financial or strategic resolution to the problem. Although TNK is an exclusively onshore company, Dudley said of the Rosneft tie-up: "There may be some way to have them involved in it. We would not be opposed to it."

BP later confirmed "immediate plans" to enter into arbitration proceedings on the dispute by 25 February in line with the direction of the court.

He was also unconcerned about the decision by the AAR consortium of billionaires, who own the other half of BP-TNK, to block a $1.8bn dividend payment - costing the British company $900 million in the short term.

Byron Grote, BP's chief financial officer, said: "We hold $18bn of cash.We are not in immediate need of a dividend from TNK."

The oil giant has been selling billions of pounds of assets to beef up its balance sheet amid rising compensation claims from the Gulf disaster.

Dudley said the company's strategy was to focus on value rather than volume, with guidance for another 11 per cent drop in production in 2011 after a 9.4 per cent fall last year.

He added that nobody could predict where the oil price would go - with Brent crude staying above $100 yesterday - but that BP continued to plan on the basis of $60 to $90 a barrel.

The company's exploration and production division made a Q4 profit of 8bn against 8.5bn in the same quarter of 2009, with the high oil price helping to offset lower production.

The refining and marketing arm swung back into profit, with earnings of 964m compared with a loss of 1.9m last time.

BP's shares closed up 6.15p at 491p.