Speaking after BP announced the sale of its petrochemicals business to INEOS in a US$5 billion deal, Steve Jenkins, vice president of Wood Mackenzie’s petrochemicals team, said: “While most of the oil majors and NOCs are focusing on strengthening their petrochemical integration, BP has divested the last of its standalone petrochemical assets.
“This ends a slow exit from the sector that began in 2005. Most of BP's chemicals business was divested to INEOS at that time, along with two major integrated refinery/chemicals sites.
“Most of BP's chemicals business was divested to INEOS in 2005, along with two major integrated refinery/chemicals sites.
"Aside from the remaining deeply integrated Gelsenkirchen site, BP has now exited the chemicals business."
He added: "This is a significant move, signalling its switch to focus on new energies.
“This move makes strategic sense. BP held onto these assets in 2005 when they were making strong profits. Now these chemicals businesses are struggling with over-capacity and BP is urgently raising cash.
“INEOS is, no doubt, relying upon capturing significant operational synergies as it integrates the two businesses. The deal includes a number of collocated assets and represents a good overall portfolio fit with very limited overlap.”