Economy

BP files for IPO of USA pipeline assets

Oil giant BP is planning a multimillion dollar initial public offering of its U.S. pipeline assets on the New York Stock Exchange, the company confirmed on Monday (11 September).

Oasis Midstream Partners LP, an MLP formed by Oasis Petroleum to own natural gas and oil assets in the Williston Basin, announced terms for its IPO on Monday.

Though MLPs suffered in the oil price downturn as investors anxious about the safety of their steady dividends - another characteristic of the MLP structure - they have proved a beneficial way for big energy companies to manage their midstream assets. They do not pay corporate income tax on distributions, or earnings, to partners.

BP PLC is moving forward with plans to float some of its vast network of USA pipelines in a move that would spin out cash from the company's infrastructure assets across America.

Barclays, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan and Morgan Stanley are among the underwriters for the IPO.

Other energy companies that have spun off their pipeline assets include Royal Dutch Shell - which in 2014 raised almost $1 billion in the largest master limited partnership IPO to date - and refiners such as Valero Energy Corp, Tesoro Corp and Marathon Petroleum Corp.

The Houston, TX-based company plans to raise $150 million by offering 7.5 million common units at a price range of $19 to $21.



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