Exit sought

Bri­tish oil gi­ant BP seeks buy­ers for its 50 per­cent stake in a Chi­nese petro­chem­i­cals joint ven­ture, its sin­gle largest in­vest­ment in China.

China Daily (USA) - - FRONT PAGE -

Bri­tish oil ma­jor BP Plc is seek­ing buy­ers for its 50 per­cent stake in a Chi­nese petro­chem­i­cals joint ven­ture, its sin­gle largest in­vest­ment in China, in a deal that would fetch $2 bil­lion to $3 bil­lion, peo­ple fa­mil­iar with the mat­ter said.

BP has hired an in­vest­ment bank to sell its share­hold­ing in Shang­hai SECCO Petro­chem­i­cal Co Ltd as part of a drive to cash out of busi­nesses where it lacks con­trol, the sources added.

A suc­cess­ful deal would mark BP’s first sig­nif­i­cant exit from a busi­ness in China.

Si­t­u­ated in Cao­jing near Shang­hai, SECCO is China’s largest petro­chem­i­cals re­fin­ery and was built at a cost of $2.7 bil­lion, ac­cord­ing to BP’s web­site.

State-owned China Pe­tro­leum & Chem­i­cal Corp, known as Sinopec, and one of its units hold the other half of SECCO, ac­cord­ing to the web­site.

A Lon­don-based BP spokesman de­clined to com­ment, and Sinopec did not of­fer im­me­di­ate com­ment.

SECCO, a ven­ture formed in 2001, pro­duces eth­yl­ene and propy­lene, which are used to make resins, plas­tics and syn­thetic rub­bers.

While Sinopec has the right of first re­fusal on the po­ten­tial sale, bankers said Chi­nese State-owned en­ter­prises are un­likely to step in to buy the stake.

BP’s stake has been mar­keted to ex­ist­ing re­fin­ery op­er­a­tors in China, in­clud­ing com­pa­nies from Ja­pan, South Korea and Europe, the sources added.

BP, like other global oil and gas com­pa­nies, has been sharp­en­ing its fo­cus on costs and core busi­nesses as it reels from lower oil prices.

It has sold more than $50 bil­lion of as­sets since the deadly 2010 Gulf of Mex­ico oil spill in or­der to pay for cleanup costs and le­gal bills. This year, it plans to off­load be­tween $3 bil­lion and $5 bil­lion worth of as­sets, of which $1.9 bil­lion has been agreed, it said when re­leas­ing sec­ond-quar­ter earn­ings last month.

REUTERS

A BP gas sta­tion is re­flected in a pud­dle in Moscow.

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