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Correction: BP Seeking To Sell Two U.S. Refineries

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3/6/2012 10:55 PM ET

(Original article incorrectly said that the company did not expect to sell the refineries until the end of 2013. A corrected version follows.)

British oil giant BP Plc (BP: Quote,BP.L) is seeking to sell two of its five refineries in the U.S. as it refocuses its refining business to process crude from new North American oil basins. The news was reportedly revealed by Iain Conn, head of BP's refining and fuel marketing business, on Tuesday on the sidelines of the IHS CERA Week energy conference in Hudson.

Buyers are said to be showing interest to bid for the Texas city and Carson city refineries, which will include BP's California fuel distribution business. The Texas facility sale process could be delayed a bit due to final settlements on meeting safety milestones related to a 2005 accident that killed 15 workers.

BP announced in early 2011 that it would sell two refineries by the end of 2012.

The company expects proceeds of about $4 billion from the sale of the refineries as it seeks to reach its asset sales program target of $45 billion by the end of 2013. BP had raised this target by another $15 billion from $30 billion while announcing a strong third-quarter profit for BP in October.

The company had said earlier that "the sale of these mature assets will allow us to concentrate our efforts on our strong core positions in the U.S. and globally."

The company went on an asset sale spree in the wake of Deepwater Horizon disaster in 2010. The well explosion at the BP-leased Deepwater Horizon rig on April 20, 2010 had killed eleven and seriously injured many of the 126 workers on the rig, which eventually sank in about 5,000 feet of water. It caused the biggest environmental disaster in U.S. history.

The company plans to sell around half of its refining capacity in the U.S., while divesting non-core assets, in order to reinvest in higher growth areas such as adding refining capacity in Asia to target the largest consumer market, particularly in China and India, to sell refined products.

The company has completed the divestment of non-strategic terminals and pipelines in the U.S. East of Rockies and West Coast, and of our fuels marketing businesses in several African countries. BP also announced in February 2012 its intention to sell its bulk and bottled LPG marketing businesses in nine countries.

On February 28, BP agreed to sell its interests in the Hugoton, Kansas-based Jayhawk gas processing plant and associated producing gas fields in Kansas to an affiliate of LINN Energy, LLC (LINE) for about $1.2 billion in cash.

BP closed Tuesday's regular trading session at $46.23, down $1.73 or 3.61% on a volume of 10.55 million shares, higher than the three-month average volume of 7.58 million shares.

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by RTT Staff Writer

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