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BP sells remaining UK refinery

Written by Business Weekly

Wednesday, 07 February 2007

Energy giant BP’s last remaining UK oil refinery – at Coryton in Essex – has been sold to Petroplus in Switzerland in a £711m deal. Energy giant BP’s last remaining UK oil refinery – at Coryton in Essex – has been sold to Petroplus in Switzerland in a £711m deal. Business Weekly reported in June 2006 that BP aimed to sell the Essex refinery after a review of the company’s European refining portfolio concluded that maintaining a smaller network of advantaged refineries in Europe would provide greater benefit to the BP Group. The total price of £711m for the installation, capable of producing 172,000 barrels of oil per day, includes the adjacent bulk terminal and BP’s UK bitumen business which is closely integrated with the refinery. Petroplus already operates a refinery in Teeside, which it acquired in 2000, and others in Belgium and Switzerland. Petroplus has entered into a long term supply contract with BP starting in mid-2007, when the sale is expected to complete. The Swiss company said it expects to retain all of the 540 staff currently employed by BP at the plant, in addition to the 500 plus contractors. Thomas O’Malley, Petro-plus CEO said: “We are committed to working with our BP counterparts to ensure that we provide a safe and stable transition period for the refinery and all of its employees.” The facility produces petrol and diesel, including the new ‘cleaner’ fuels, aviation fuels, liquefied petroleum gas (LPG), fuel oils and bitumen. It supplies both Heathrow and Gatwick airports with jet fuel via direct pipelines and has one of the largest road distribution terminals in Europe. ”The sale will enable us to concentrate on continually improving our remaining European refineries so that they remain top class assets,” said John Manzoni, chief executive of BP’s refining and marketing business. BP stressed that it still intends to provide petroleum products for its home country: “We are very much committed to the UK and do not need to own a refinery in the UK to offer our UK customers the best in fuel products,” said Manzoni. News of the sale comes after BP reported record profits for 2006, rising to £11.3bn, a result of high oil prices early in the year. The strong full-year performance came despite low figures for Q4, caused by increased safety spending. The acquisition will provide a significant boost to the production capabilities of the Petroplus, it said. The company’s existing facilities are capable of producing 295,000 barrels per day, which will increase by a further 110,000 after the firm’s planned purchase of yet another refinery in Ingolstadt, Germany from ExxonMobil.

 

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