BP announces it will sell refinery in Texas City

February 1, 2011 4:21:40 PM PST
BP PLC announced Tuesday it is resuming dividends for the first time since the Gulf of Mexico well disaster, as the oil company reported a 30 percent gain in fourth-quarter profits which fell short of reversing a full-year loss. BP said it had booked a charge of $40.9 billion for the full year to cover the cost of the explosion aboard the Deepwater Horizon drilling rig which killed 11 workers, and for the costs of stopping and cleaning up the oil spill along the southern U.S. coast.

The company also announced plans to sell two U.S. refineries including the Texas City facility where 15 workers died in a massive explosion in 2005.

BP, which suspended dividends following the Macondo well blowout in the Gulf of Mexico in April, said it would pay 7 cents per share -- half the amount paid in the fourth quarter of 2009.

"We believe now is the right time to resume payment of a dividend to our shareholders," said Chairman Carl-Henric Svanberg. "We have chosen a prudent level that reflects the company's strong underlying financial and operating performance but also recognizes the need to fully meet our obligations in the Gulf of Mexico and to maintain financial flexibility."

The company made a profit of $5.6 billion in the fourth quarter, up from $4.3 billion a year earlier. However, for the full year BP booked a loss of $3.7 billion compared with a profit of $16.6 billion in 2009.

Replacement cost profit -- a closely watched industry measure which reflects inventory gains and losses -- was $4.6 billion for the quarter, up from $3.4 billion a year earlier. For the full year BP saw a replacement cost loss of $4.9 billion, compared with a profit of $14 billion in 2009.

BP said it had spent more than $1 billion modernizing the Texas City plant, but said it "lacks strong integration into any BP marketing assets."

However, BP said it will keep the chemicals complex at Texas City.

BP said it also hopes to sell the Carson refinery near Los Angeles along with its marketing business in southern California, Arizona and Nevada. The company plans to concentrate its U.S. refining and marketing activity at Whiting, Ind., and Cherry Point, Wash., in its 50 percent stake in the Toledo, Ohio, refinery.

"2011 will be a year of recovery and consolidation as we implement the changes we have identified to reduce operational risk and meet our commitments arising from the spill," said BP Chief Executive Bob Dudley. "But it will also be a year in which we have the opportunity to reset the company, adjusting the shape of our business, and focus on growing value for shareholders."

Load Comments