Express Business Filler #1

BP announced yesterday that it has agreed to sell its 36.9 per cent stake in the Atlas Methanol plant on the Point Lisas Industrial Estate, as part of a larger divestment of its petrochemicals business throughout the world for US$5 billion.

The operator of Atlas is Methanex, the Canadian methanol giant that owns the remaining 63.1 per cent of Atlas, which has a production capacity of 1.7 million metric tonnes per year. In March, Methanex announced it was indefinitely idling its Titan Methanol plant, of which it owns 100 per cent. Titan plant has a production capacity of 875,000 metric tonnes per year.

A statement from BP said the buyer of BP’s petrochemicals business is British company, Ineos, which will pay BP a deposit of US$400m, followed by US$3.6 billion when the deal completes and then another US$1 billion in three instalments by June 2021.

The deal will result in Ineos taking on BP’s aromatics division, which produces chemicals for polyester used in clothing, film and packaging, as well as BP’s acetyls business, whose products are used in food flavourings, paints and glues.

Bernard Looney, BP’s 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.”

In a statement, T&T’s former minister of energy, Kevin Ramnarine, said the decision by BP plc to sell its global petrochemical business is yet another sign of the major changes taking place in the company, including its desire to raise US$15 billion and its commitment to “net zero” carbon emissions by 2050.

“It is inevitable that these changes will eventually cascade down to T&T. Given that BP is the largest economic player in the T&T economy, it is important that the Government and policymakers are cognizant of the changes taking place with BP plc. Unfortunately, I get the impression that this is not the case and we are not adapting to the changing global energy environment,” said Ramnarine.

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