The deal comes as new chief executive Bernard Looney looks to strengthen the company's balance sheet in the face of collapsing oil prices.
Under the terms of the agreement, INEOS will pay BP a deposit of $400 million and will pay a further $3.6 billion on completion.
An additional $1 billion will be deferred and paid in three separate instalments of $100 million in March, April and May 2021 with the remaining $700 million payable by the end of June 2021.
The transaction is expected to complete by the end of 2020.
UK energy giant INEOS, led by Jim Ratcliffe, has built a global empire from building up unwanted chemicals businesses from giants such as ICI.
Under the hammer go BP's huge aromatics and acetyls businesses. The aromatics division makes packaging for the food and drink industries as well as specialised materials for clothing and carpets.
Its primarily based in China, the US and Belgium.
The acetyls division makes acid commonly used in foods to give flavouring such as salt and vinegar crisps. It has plants in the US and across Asia.
BP said the deal meant it had reached its $15 billion divestment target a year early, raising cash to invest in its core oil and gas operations.
Looney said: “Strategically, the overlap with the rest of BP is limited and 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. Today’s agreement is another deliberate step in building a bp that can compete and succeed through the energy transition."
Proceeds of the sale would go on “general corporate purposes”, BP said.
Earlier this year, Looney surprised some investors by going ahead with paying its dividend despite the company coming under massive pressure from the collapse in the oil price.
Today’s sale, which sees an upfront deposit payment of $400 million followed by a further $3.4 billion on completion, will go some way towards easing its cash crunch.
Outgoing finance director Brian Gilvary led the talks with Ineos. He said: “BP has had a long relationship with INEOS and this agreement reflects the mutual respect and trust that exists between us. It is a strategic deal for both parties that recognises both the high quality of the businesses and that INEOS is in many ways a natural owner for them.”
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