Chemicals giant Ineos has swooped for BP’s global Aromatics and Acetyls business in a £4 billion deal.
The agreement, which includes the site at Saltend, Hull, will see 1,700 staff transfer, with other plants in Asia, the US and Belgium.
A total of 300 are employed in East Yorkshire.
It comes as redundancies were looming at the oil major, and after a pandemic period in which these operations were seen as round-the-clock hero producers of vital substances.
The deal will prompt the reintegration of the two plants, with both having previously been part of the BP portfolio.
It gradually divested what became Saltend Chemicals Park, with PX Group taking over the wider site and BP becoming a tenant.
Sir Jim Ratcliffe, founder and chairman, said: “We are delighted to acquire these top-class businesses from BP, extending the Ineos position in global petrochemicals and providing great scope for expansion and integration with our existing business.
“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.”
World-class assets and an experienced team were flagged.
It means that a changing BP has met its promise to sell off £12 billion of assets a year earlier than initially promised.
It is another step in a revamp led by the FTSE 100 listed oil giant’s new boss Bernard Looney.
Mr Looney has promised to set a new course for BP, which includes tackling emissions – a potential existential crisis for the oil industry.
“This is another significant step as we steadily work to reinvent BP,” he said.
The business fell out of favour with bosses who thought it would be too costly to grow on its own.
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses,” Mr Looney said.
“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.”
Sir Jim is a former Beverley Grammar School pupil.
The acetyls team produce acetic acid and acetic anhydride, critical for producing medications, such as paracetamol, insulin and high blood pressure treatments; disinfectant used in hospitals and cities; medical protective clothing; and a bleaching activator in disinfectant, sterilant, sanitiser and detergents.
The aromatics team produce paraxylene and purified terephthalic acid (PTA), a key building block in polyester products that are in high demand due to the pandemic. PTA is also critical for producing bottles for sanitisers, liquid soaps and detergents; face masks and disposable protective aprons; water bottles and safe pharmaceutical and medical packaging.
Saltend was recently revealed as a key target for the Humber’s carbon capture and storage proposals, as the optimum pipeline pathway was revealed.
Analysing the deal, Professor David Elmes, who leads the Global Energy Research Network at Warwick Business School, said: “This is another step in Bernard Looney’s shaping of a new BP. Oil market commentators have suggested the decreasing demand for oil as electric vehicle numbers rise would be replaced by increasing oil use for plastics and petrochemicals. Today’s sale by BP means the company is spinning off what they have left of their downstream market.
“Completing this deal also marks a milestone for departing CFO Brian Gilvary as it completes the firms $15bn divestment goal a year early. BP has caught the attention with recent announcements on reaching net zero emissions, reducing its headcount and writing off the value of some future oil and gas development.
“These are steps away from its focus on oil and gas but major news on what will take its place is now even more eagerly anticipated.”
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