One of the UK’s largest private companies has struck a five billion dollar (£4 billion) deal to buy a wing of BP that had fallen out of favour at the oil giant.
Ineos will pay BP in six installments until June next year for its petrochemicals business which makes a key component in polyester.
The business employs around 1,700 staff, spread mainly across the Asia, the US, Belgium and a plant in Hull.
It means that a changing BP has met its promise to sell off 15 billion dollars (£12 billion) of assets a year earlier than initially promised.
It is another step in a revamp led by the FTSE 100 listed oil giant’s new boss Bernard Looney.
Mr Looney has promised to set a new course for BP, which includes tackling emissions – a potential existential crisis for the oil industry.
“This is another significant step as we steadily work to reinvent BP,” the new boss said on Monday, about five months after taking charge.
The business fell out of favour with bosses who thought it would be too costly to grow on its own.
“Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses,” Mr Looney said.
“As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. Today’s agreement is another deliberate step in building a BP that can compete and succeed through the energy transition.”
Ineos founder Sir Jim Ratcliffe, who was once named the UK’s richest person by the Sunday Times Rich List, said: “We are delighted to acquire these top-class businesses from BP, extending the Ineos position in global petrochemicals and providing great scope for expansion and integration with our existing business.”
“This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry.”
The 1,700 jobs at BP petrochemicals are expected to transfer over to Ineos, BP said.