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BP PLC on Monday said it has reached an agreement to sells its 50% in the BP-Husky Toledo refinery in the US state of Ohio to Cenovus Energy Inc, its joint venture partner in the facility.
Back in 2008, BP formed a joint venture, when Husky Energy Inc acquired a 50% stake in BP's Toledo refinery. In January 2021, Calgary-based oil firm Cenovus combined with Husky in an all-stock transaction.
Since then, the BP-operated refinery has played an ‘important’ part of Ohio's economy, processing up to 160,000 barrels of crude oil per day.
Under the agreement, which is expected to close later this year, Cenovus will pay $300 million in cash for BP's stake in the refinery, plus the value of inventory.
BP said it will enter a multi-year product supply agreement with Cenovus, the details of which were not disclosed.
This news follows a separate deal with Cenovus, which was announced back in June. BP said it had sold its 50% stake in the Sunrise oil sands projects in the western Canada province of Alberta to Cenovus.
The transaction, which also is due to close in 2022, will see BP receive up to $934 million in cash, over the course of two years. On top of that, BP will receive a 35% stake in Cenovus's Bay du Nord project off the eastern Canada province of Newfoundland & Labrador.
Following the close of the deal, BP will no longer have interests in oil sands production and will shift its focus to future potential offshore growth in Canada. Oil sands production is controversial due to the environmental impact of its extraction and the high emissions cause when it is burned.
Meanwhile, in the US, BP's refining portfolio will reduce from three to two facilities, once its stake in the BP-Husky Toledo refinery has been sold.
‘Going forward, BP will focus investment on its Whiting refinery in Indiana and Cherry Point refinery in Washington, which are strategically positioned to serve customers in the Midwest and Pacific Northwest,’ the company said.
When taken together, these two deals will ‘reshape’ its North American oil and gas portfolio for long-term profitable growth, BP added.
BP America Chair & President Dave Lawler said: ‘We are proud of the business we have built in Toledo, which has provided thousands of good-paying jobs and made significant contributions to Ohios economy and Americas energy security for decades. As our partner in Ohio, Cenovus is ideally placed to take this important business into the future.’
Shares in BP were up 2.0% to 424.68 pence each in London on Tuesday afternoon.
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