Marathon/BP - bargain purchase - FT.com No one likes to be upstream without a paddle. But investors are learning to love being downstream. Marathon Petroleum's purchase on Monday of the Texas City refining complex from BP offers some sharp evidence. The buyer was part of Marathon Oil, until it split its upstream and downstream operations into separate companies in 2011. That experiment worked - the combined market capitalisation of the new companies is more than $40bn, twice what the parent was worth when it split. Downstream has also trounced the upstream guys this year - its shares are up 75 per cent against zero for upstream. That is at least partly explained by the fact that the split has left Marathon Petroleum free to expand in a refining sector that upstream has never much liked. In fact, the refining business is flourishing (relatively) in the US, where margins are more robust than in Europe because of the big domestic market and a concentration on high-value products such as jet fuel. Marathon is paying $1.8bn for the Texas City plant and inventory. That is a big discount to what BP received when it sold its Carson City refining complex in California to Tesoro in August. That involved a smaller plant (266,000 barrels a day of refining capacity compared with 475,000 at Texas City) but it fetched a similar price. That may reflect the tragic recent history of Texas City - an explosion in 2005 that killed 15 people. BP has had this sale on its to-do list for a while. The purchase looks a bargain for Marathon given that BP has spent $1bn turning Texas City into one of the most modern refineries in the US. Marathon already has a plant in Texas City refining 80,000 b/d, so BP's plant will give it more heft. The company forecasts that it can wring pre-tax earnings synergies of $440m from the plant up to 2017. Given Marathon's record, that looks eminently achievable.