Following today’s announcement that BP will sell its petrochemicals business to INEOS;

Will Scargill, Managing Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the transaction rationale:

“While many oil and gas companies have recently looked to petrochemicals integration as a way to drive value, BP’s petrochemicals unit was not particularly well suited to its new energy transition strategy. Its aromatics focus tied it to oil, putting it at odds with the shift to cleaner sectors such as gas and renewables and making it a natural area for divestment as the company looks to streamline.

“Furthermore, meeting its $15bn divestment target ahead of schedule will be a welcome financial boost given the market turmoil caused by the COVID-19 pandemic.

“Meanwhile, for INEOS, this transaction will be a major step forward in its growth plans. At a stroke, the company will become a major player in aromatics, while at the same time building on geographical and operational synergies.”