BP will sell its global petrochemicals business to billionaire Jim Ratcliffe's Ineos for $5 billion, the oil major said on Monday as it achieves its asset sale target of $15 billion a year in advance.
Its London-listed shares moved higher after the news, rising about 1.5% as of 0913 GMT.
BP said Ineos will pay a deposit of $400 million and another $3.6 billion on completion of the deal, which is expected by the end of the year, while the remaining $1 billion will be paid in tranches in 2021.
Big oil and gas companies are forced to rein in on spending following the collapse in oil prices due to the coronavirus-led weak demand and excess supply.
"With today's announcement, we have met our $15 billion target for agreed divestments a full year ahead of schedule, demonstrating the range and quality of options available to us," Chief Financial Officer Brian Gilvary said.
The petrochemicals unit is focused on two main businesses, aromatics and acetyls, with 14 manufacturing sites in Asia, Europe and the United States. In 2019, the unit produced 9.7 million tonnes of petrochemicals.
"Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses," said Chief Executive Officer Bernard Looney, who kicked off BP's biggest revamp in its 111-year history.