Exclusive: BP seeks buyers for its half of China petchem venture
By Arno Schuetze and Denny Thomas
FRANKFURT/HONG KONG (Reuters) - British oil major BP is seeking buyers for its 50 percent stake in Chinese petrochemicals joint venture SECCO, its largest investment in China, in a deal sources said could fetch $2-$3 billion.
State-owned China Petroleum & Chemical Corp (Sinopec), which owns the other half of the venture and has a right of first refusal, said it was discussing the conditions put forward by BP, but has made no decision.
BP is working with Morgan Stanley to sell its shareholding in the SECCO venture as part of a drive to cash out of businesses where it lacks control, three sources familiar with the matter said. 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.
BP shares were up 1.1 percent in morning trade, outpacing a 0.3 percent rise in the FTSE index, as investors digested news that would bolster its cash position and underpin dividends. Sinopec's Shanghai-listed shares were up 1 percent, slightly outperforming the broader China market.
A London-based BP spokesman declined to comment. Morgan Stanley was not available for immediate comment.
SECCO, a venture formed in 2001, produces ethylene and propylene, which are used to make resins, plastics and synthetic rubbers.
Bankers said Chinese state enterprises were unlikely to step in to buy the stake as executives at many of them are distracted by anti-corruption probes. Continued...