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The British energy giant BP Plc (BP - Analyst Report) aims to sell its Texas City refinery to Ohio-based Marathon Petroleum Corp. (MPC - Analyst Report), according to a report by The Financial Times. This move is integral to BP’s efforts to shed its properties to cover the 2010 Deepwater Horizon oil spill cost.

Although BP and Marathon declined to comment on this specific transaction, BP pointed out that it remains on track for a potential sale of its Texas City refinery by the end of the year. The sale of this refinery, the third largest in the U.S., could fetch up to $2.5 billion (1.9 billion euros) for BP.

Even before the Macondo accident, this 475,000 barrel a day facility witnessed a deadly explosion in March 2005. The incident took the lives of 15 workers and injured as many as 170, raising a safety alarm across BP's U.S. operations. Following this, the company shut down the refinery for about two years and incurred $1 billion on compensations to restore the unit. Again in 2007, BP announced it spent $1.6 billion to recompense the sufferers.

In recent times, BP has divested a number of non-strategic assets that include Gulf of Mexico (GoM) oil and gas assets to Plains Exploration & Production Co. for $5.55 billion as well as its Canadian natural gas liquids business to Houston's Plains All American Pipeline L.P. (PAA - Analyst Report) for $1.67 billion. Recently, it has also disposed the Carson refinery in California to Tesoro Corporation (TSO - Analyst Report) for $2.25 billion. However, the company intends to retain three core U.S. sites, Whiting in Indiana, Cherry Point in Washington and Toledo in Ohio.

These negotiations are in line with BP’s divestment program that sees the British major getting rid of its mature, non-core upstream assets to create a portfolio with strong growth potential operating from a smaller base. The company is set to divest around $38 billion worth of assets by 2013, of which it has already announced disposals of $33 billion.

BP carries a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. We also maintain our long-term Neutral recommendation on the company.

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