BP seeks buyers for petrochem JV stake

A BP gas station is reflected in a puddle in Moscow. [Photo/Agencies]

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.