BP Amoco Announces Ambitious Restructuring Plan, Investment, and Asset Disposals

BP Amoco, one of the world's largest oil companies, is undertaking a significant restructuring effort, aiming to invest $26 billion over the next three years, cut costs by $4 billion, and sell assets worth $10 billion. The plan, announced yesterday, is designed to meet ambitious new financial targets, with the company aiming to improve its return on capital by five to six percentage points to 16% by the end of 2001. The restructuring involves the disposal of a third of the group's refining capacity, exploration and production assets worth $4 billion, and $2.5 billion of its chemical operations.

Key Takeaways:

BP Amoco plans to invest $26 billion over the next three years, cut costs by $4 billion, and sell assets worth $10 billion as part of its restructuring effort.
The company aims to improve its return on capital by five to six percentage points to 16% by the end of 2001.
The group will dispose of a third of its refining capacity, some $4 billion of exploration and production assets, and $2.5 billion of its chemical operations.
BP Amoco will sell its 64% stake in Altura Energy, an oil and gas producer in Texas and New Mexico.
The company will also dispose of its Canadian oil interests and its Alliance Refinery in Louisiana.
Analysts expect BP Amoco to make more asset disposals and savings of another $1 billion if it succeeds in persuading regulators to allow it to buy Atlantic Richfield Corporation.
The company's market value is £125 billion, making it the UK's largest company.
The shares rose 26p to close at £12.85 yesterday.

Statistics:

BP Amoco's investment over the next three years: $26 billion (£16.7 billion)
Cost cuts: $4 billion
Asset sales: $10 billion
Return on capital target: 16% by the end of 2001
Refining capacity to be disposed of: one-third
Exploration and production assets to be disposed of: $4 billion
Chemical operations to be disposed of: $2.5 billion
Market value: £125 billion
Share price: £12.85

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