Slimmer BP is looking more digestible

The British oil group sold the Carson refinery, south of Los Angeles, and its 800 dealer-operated petrol stations in southern California, Arizona and Nevada for $2.5-billion. The sale brings the divestments BP has made since the start of 2010 to $26.5-billion. It said it was on track to achieve $38-billion of asset sales by the end of next year.

BP has been selling off non-core assets since the Deepwater Horizon disaster in the Gulf. The cost of the world's biggest offshore spill is still rising, forcing the group to set aside a further $847-million recently, increasing the potential bill to $38-billion. BP maintains that it has turned the corner, but its second-quarter figures disappointed the London financial sector with a 35% drop in underlying profits.

BP has become a takeover target in the wake of the disaster, which has damaged its reputation and finances. The disposals have made it a "much smaller meal" to digest, according to Louise Cooper, analyst at London broker BGC Partners, who said it was "no longer a 10-course feast".

BP remains under the cloud of the spill because it is yet to reach a settlement with the US department of justice, and it is locked in a dispute with its partners in the Russian TNK-BP venture, which makes up 10% of group profits.

As part of the refinery deal, BP is also selling storage and distribution assets, including more than 100km of pipeline and several marine, land storage and product marketing terminals.

New owner Tesoro would retain the majority of the 1700 staff at the refinery, petrol stations and other assets, said BP, which put the Carson and Texas City refineries, two of its five in the US, up for sale in February last year. Texas City remains unsold. – © Guardian News & Media 2012

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