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Mike Mozart
BP has hired investment bank to handle the sale. Reuters’ sources said BP wants get rid of the asset due to lack of control over the enterprise. A successful deal would be the first major signal that BP is going to completely leave the Chinese market, according to Reuters.
SECCO is the largest petrochemical plant in China; its cost of construction was $ 2.74 billion. The enterprise’s ownership is shared by BP, China's state petrochemical company Sinopec, and one of its subsidiaries. BP and Sinopec declined to comment on the deal.
Sinopec has a right of first refusal on the potential sale, yet, according to Reuters, it is unlikely that the company would impede the deal.
Secco, founded in 2001, is the most significant BP’s investment in China. The enterprise produces acrylonitrile, aromatics, polyolefins, polystyrene and styrene, using the products of its ethylene plant with capacity of 900 tons/year.
The deal could cost USD 2 to 3 billion. If sealed, it could become a first sight of BP’s complete farewell to the Chinese market. Note that the British corporation has several joint ventures with Sinopec, including Yaraco joint venture for the production of acetylene in Chongqing, and acetic acid plant in Nanjing.
Despite the fact that BP intends to leave the major project in China, the British company still has a number of other major projects in the PRC. For example, at the end of March this year, BP and China National Petroleum Corporation (CNPC) signed an agreement on exploration, development and production of shale gas in the Neijiang-Dazu block, located in the Sichuan Basin. CNPC is one of the main suppliers and contractors in the oil and gas industry worldwide. Therefore, this deal is significant for both sides; in particular, it’s the first shale gas agreement of BP in China.
Moreover, the agreement implies future cooperation between the Chinese and the British companies. Its main goal is to create companies that will specialize in the sale of fuel from the PRC. Besides, the deal stipulates search for future opportunities to trade oil and LNG throughout the world.
The Chinese petrochemical industry is burdened with excessive production capacities, which quality leaves much to be desired. Given this, China will have to shut down all obsolete capacities, consolidate production and reduce pollution.
August 3, the State Council of China approved a document to improve petrochemical sector’s competitiveness within the industry’s reform. Chinese authorities intend to build seven coastal petrochemical production bases to consolidate the industry. Among the projects are an installation in Ningbo port worth $ 15 billion, and a processing center in Hebei Province. In conjunction with admission of foreign investors in acquisition of petrochemical assets in China, this step will increase competitiveness of the country’s petrochemical sector.
After the oil spill in the Gulf of Mexico, BP sold its assets for $ 50 billion to compensate for the damage done by the disaster. This year, BP plans to gain from the sale of assets $ 3 to $ 5 billion, said Reuters.
source: reuters.com
SECCO is the largest petrochemical plant in China; its cost of construction was $ 2.74 billion. The enterprise’s ownership is shared by BP, China's state petrochemical company Sinopec, and one of its subsidiaries. BP and Sinopec declined to comment on the deal.
Sinopec has a right of first refusal on the potential sale, yet, according to Reuters, it is unlikely that the company would impede the deal.
Secco, founded in 2001, is the most significant BP’s investment in China. The enterprise produces acrylonitrile, aromatics, polyolefins, polystyrene and styrene, using the products of its ethylene plant with capacity of 900 tons/year.
The deal could cost USD 2 to 3 billion. If sealed, it could become a first sight of BP’s complete farewell to the Chinese market. Note that the British corporation has several joint ventures with Sinopec, including Yaraco joint venture for the production of acetylene in Chongqing, and acetic acid plant in Nanjing.
Despite the fact that BP intends to leave the major project in China, the British company still has a number of other major projects in the PRC. For example, at the end of March this year, BP and China National Petroleum Corporation (CNPC) signed an agreement on exploration, development and production of shale gas in the Neijiang-Dazu block, located in the Sichuan Basin. CNPC is one of the main suppliers and contractors in the oil and gas industry worldwide. Therefore, this deal is significant for both sides; in particular, it’s the first shale gas agreement of BP in China.
Moreover, the agreement implies future cooperation between the Chinese and the British companies. Its main goal is to create companies that will specialize in the sale of fuel from the PRC. Besides, the deal stipulates search for future opportunities to trade oil and LNG throughout the world.
The Chinese petrochemical industry is burdened with excessive production capacities, which quality leaves much to be desired. Given this, China will have to shut down all obsolete capacities, consolidate production and reduce pollution.
August 3, the State Council of China approved a document to improve petrochemical sector’s competitiveness within the industry’s reform. Chinese authorities intend to build seven coastal petrochemical production bases to consolidate the industry. Among the projects are an installation in Ningbo port worth $ 15 billion, and a processing center in Hebei Province. In conjunction with admission of foreign investors in acquisition of petrochemical assets in China, this step will increase competitiveness of the country’s petrochemical sector.
After the oil spill in the Gulf of Mexico, BP sold its assets for $ 50 billion to compensate for the damage done by the disaster. This year, BP plans to gain from the sale of assets $ 3 to $ 5 billion, said Reuters.
source: reuters.com
