Photo: Yuriko Nakao/Getty Images

BP announced Monday a deal to sell its petrochemicals division to the U.K.-based multinational chemical company Ineos in a $5 billion transaction.

Why it matters: It's the latest move in the oil-and-gas giant's strategic overhaul, which includes selling its Alaskan assets and a pledge to reorient its business around low-carbon goals — a transition that will unfold over decades.

  • "The move to bolster its finances comes as the energy sector takes a significant financial hit triggered by the coronavirus pandemic," the Financial Times notes.
  • BP said it has now met its target of $15 billion in asset sales a year ahead of schedule.

What they're saying: BP CEO Bernard Looney said the petrochemicals business has "limited" strategic overlap with the rest of BP, and that "it would take considerable capital for us to grow these businesses."

  • "As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction," he said in a statement.

Where it stands: BP's petrochemicals division is focused on products called aromatics and acetyls, which are used in packaging, paint, adhesives and many other applications.

  • The business spans manufacturing plants in Asia, Europe and the U.S. and last year produced 9.7 million metric tons of petrochemicals, BP said.
  • The deal also includes sale of BP's Infinia plastics recycling technology and its interest in the acetylated wood developer Tricoya.
  • The companies hope to complete the transaction by the end of this year.

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