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Three companies vying for BP’s 50% stake in Shanghai Secco Petrochemical

September 19, 2016
News

BP is planning to divest $3-5 billion this year. At least three companies are said to be vying for BP’s 50% stake in Shanghai Secco Petrochemical (Shanghai, China), which is valued between $2-3 billion, according to a Reuters report.

Shanghai Secco, formed in 2001, is a 50-50 joint venture (JV) between Sinopec and BP. It is one of China’s largest petrochemical operations and includes a 1.3–million metric tons/year naphtha cracker and many downstream units. BP, in August, has reportedly hired an investment bank to assist with the sale but BP has so far declined to comment on the issue.

The three companies vying for the stake are SK Chemicals (Seoul, South Korea), Borealis, and Ineos, Reuters reported. At least one other company is considering entering the bidding round.

The JV partner Sinopec has a right of first refusal. It has said it is discussing the conditions put forward by BP, but has made no decision.

BP is in the midst of a divestment drive in order to focus its business and boost cash flow as crude oil prices have plunged since mid-2014. It is planning divestments worth $3-5 billion this year.

The company has sold more than $50 billion of assets since a deadly explosion on an oil rig in the Gulf of Mexico in 2010. BP has sold several assets to Ineos in recent years, including the Grangemouth refinery in Scotland as part of a $9 billion sale of the olefins and refining business Innovene in 2005, Reuters reported.

By Sok Peng Chua

Source: Chemical Week

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