BP (NYSE:BP) has finally found a buyer for its Texas City, Texas, refinery. In a statement issued Monday, Marathon Petroleum (NYSE:MPC) announced that it will purchase the 451,000 barrel-a-day plant for $598 million, less than a quarter of the $2.85 billion the London-based company said it hoped to receive for the plant. Marathon will also pay an additional $1.2 billion for inventories of oil and other products and $700 million during the next six years if certain conditions are met.
The deal is expected to contribute to Marathon’s earnings in the first year of operations.
When BP assessed the worth of the refinery in 2011, the company’s head of refining and marketing, Iain Conn, said the plant was expected to fetch more than the 10-year average of $6,000 a barrel, or $2.85 billion. However, on a per-barrel basis, $598 million is less than half the average price at which refineries have sold since 2009. According to data compiled by Bloomberg, it is one of the lowest valuations in two decades.
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While the price was well below expectations, BP has nearly met its fundraising goal. Following the 2010 oil spill in the Gulf of Mexico, BP proposed to raise $38 billion from asset sales; the sale of the Texas City refinery and a $5.55 billion divestiture of its stake in several Gulf of Mexico oil fields last week brings BP to $34 billion.
Both Marathon and BP are trading lower this afternoon.