BP agrees to sell stake in Ohio refinery to Cenovus for $300M


A joint venture of BP PLC and Husky Energy Inc., which was acquired by Cenovus Energy in 2021, has owned the Toledo refinery since 2008. Standard Oil of Ohio first opened the refinery in 1919.
BP PLC


By Emily Burleson – Reporter, Houston Business Journal
Aug 10, 2022

BP PLC’s (NYSE: BP) crude refining business in the U.S. is shrinking now that the London-based supermajor has agreed to sell its stake in a Toledo, Ohio, refinery to its joint venture partner.

Calgary-based Cenovus Energy Inc. (NYSE: CVE) agreed to pay about $300 million in cash to buy out BP’s 50% stake in the 160,000-barrels-per-day refinery, known as BP-Husky Toledo Refinery, the companies said Aug. 8. The two companies also said they would enter a long-term supply agreement.


The deal is expected to close before the end of 2022. At that point, Cenovus will own and operate the entire refinery, which had been a joint venture between BP and Husky Energy Inc., another Canadian oil company, since 2008. Cenovus inherited Husky’s 50% stake in early 2021 when its acquisition of the integrated oil and gas company closed.

BP said it expects that Cenovus will rehire the 580 employees at the Toledo refinery.

Standard Oil of Ohio first opened the Toledo refinery in 1919. In recent years, the joint venture completed a maintenance turnaround on the facility's isocracker and reformer units and also spent more than $130 million on projects that reduced certain units' emissions, according to BP.

Following the Toledo refinery’s sale, BP will be left with just two refineries in the U.S., which make up about half of its global refining capacity: the massive Whiting refinery in Indiana with the capacity to refine 435,000 barrels per day and the 240,000-barrels-per-day Cherry Point refinery in Washington. BP’s five other refineries are in other countries.

Other major companies are also reducing the number of refineries they own in the U.S., like Shell PLC (NYSE: SHEL), or trying to exit the refining business altogether, like LyondellBasell Industries NV (NYSE: LYB).

Meanwhile, BP's refinery deal with Cenovus is just the latest in a series of assets changing hands between the two companies.

In June, BP agreed to sell Cenovus its 50% non-operated stake in the Sunrise oil sands project in northern Alberta. In return, BP will receive $600 million Canadian dollars as well as Cenovus’ 35% non-operated stake in the undeveloped Bay du Nord project offshore Newfoundland and Labrador. That deal is expected to close in the third quarter of 2022.

The several discoveries within the Bay du Nord project have recoverable reserves estimates of about 300 million barrels of oil, BP said.

BP CFO Murray Auchincloss said Bay du Nord was a “fantastic discovery” during the company’s second-quarter earnings call with investors on Aug. 3.

“It's a lovely reservoir,” Auchincloss said. “We're happy to take the 35% interest in that and work with the operator, Equinor. And we'll talk to you more about it once we close because then we can actually say stuff. Right now, we're on the outside.”

BP North America, which is based in Houston, is one of the city’s 10 largest energy industry employers, according to Houston Business Journal research.