British oil giant BP Plc intends to sell its giant Texas city sprawling 1,200-acre plant, where 15 people died in a 2005 explosion that became symbolic of safety deficiencies in its culture.
The company announced plans to sell the two refineries as part of a strategy to cut its US refining capacity in half and focus more on oil and gas exploration.
BP also will sell the electric power co-generation plant tied to the refinery but keep an adjacent chemical plant. It plans to focus on refining and marketing networks in the country based around the Whiting, Indiana and Cherry Point, Washington refineries and its 50 per cent share in the Toledo, Ohio plant.
They have "greater flexibility to refine a range of crude oils, including heavy grades, and on average are more diesel-capable than BP’s current portfolio," the company said.
The UK producer plans to sell $30 billion in assets by the end of the year to help to pay the costs of the oil spill in the Gulf of Mexico, the worst in the US.
BP has so far disposed about $22 billion in assets, it said today in a separate statement.
Since March 23, 2005 blast, BP has spent more than $one billion in equipment upgrades, up to $2.1 billion to settle accident claims and more than $100 million in fines to safety and environmental regulators.
The company may well be relieved to part with the plant.
"BP had a terrible reputation in Texas City," said Gary Beevers, vice president of the United Steelworkers, which represents about 1,200 union workers at the Texas City plant and 550 at the Carson, Calif, refinery that BP also plans to sell.
"I think a change in name of the operator-ship will mean a whole lot more to the community".
The company will use the estimated $5 billion it could get from selling the two refineries to pay down costs related to the massive Gulf oil spill.
The decision is also likely to further curtail BP's its once-mighty US oil trading operation after a prolonged downturn in global downstream profits.
The 4,75,000 barrels per day (bpd) Texas City plant -- the country's third-largest-- could attract strong interest from buyers despite its history as one of the most dangerous refineries in the United States.
The 2005 explosion there injured at least 180 people in addition to killing 15, the deadliest US industrial accident in 20 years.