British oil giant BP said Friday it has completed the sale of its Texas City refinery, where a 2005 explosion killed 15 workers, and other assets to Marathon Petroleum Corp. for roughly $2.4 billion.
London-based BP said the sale, announced last year, consists of the refinery and a portion of its retail and logistics network in the southeastern U.S. The price includes $600 million in cash, $1.1 billion for the estimated value of hydrocarbon inventory and another $700 million to be paid over six years that is based on assumed future margins and refinery operations.
The price at closing was slightly less than the price when the deal was announced because of a drop in the value of inventory.
Marathon Petroleum is an oil refining, marketing, and pipeline transport company based in Findlay, Ohio. It is a separate company from Houston-based Marathon Oil.
“We are not on the front end looking at any new big projects,” Marathon Petroleum CEO Gary R. Heminger said in an interview. “We don’t want to be distracted by anything.”
He said safety and operational excellence would be the company’s focus at the Texas City refinery formerly owned by BP. The company hoisted the Marathon Petroleum flag and quickly renamed the facility to carry the Galveston Bay name because a facility it owns across the street already carried the Texas City name.
There were no immediate plans to change staffing levels at either facility, he said. The former BP refinery has roughly 2,150 employees. A few opted to take job offers to stay with BP, but the rest are staying at the plant, Heminger said.
“The completion of this divestment is a major milestone in the refocusing of our U.S. fuels portfolio,” Iain Conn, chief executive of BP’s global refining and marketing business, said in a statement.
The closing transfers ownership of the 475,000 barrel per day refinery, associated cogeneration plant and natural gas liquids pipelines, and four marketing terminals in the Southeast to Marathon Petroleum. BP said it has also assigned certain branded jobber contracts supplying roughly 1,200 retail sites in Tennessee, Mississippi, Alabama and Florida.
BP announced plans to divest its Carson and Texas City refineries in February 2011 as part of a strategy shift. The explosion at the Texas City refinery led to BP pleading guilty to a violation of the Clean Air Act.
Read more FuelFix coverage of the Texas City refinery’s bumpy history:
BP reports fire at Texas City refinery (Oct. 30)
BP’s Texas refinery sale shows volatile industry’s decay (Sept. 27)
BP’s pockets are jingling as assets sold (Aug. 27)
Oil industry, BP still haven’t learned from fatal mistakes (July 25)
Thousands sue BP over Texas City emissions (June 14)