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Sat 17 Sep 2016 02:02 PM

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Abu Dhabi-linked firm in running for BP stake in Chinese petrochemicals JV

Borealis, part-owned by IPIC, could bid for 50% stake in SECCO alongside state-owned Sinopec

Abu Dhabi-linked firm in running for BP stake in Chinese petrochemicals JV
DELVING DEEP: Borouge is a joint venture between Denmark-based petrochemical group Borealis and state-run ADNOC. (Getty Images)

At least three leading chemical companies are set to vie for
BP's stake in Chinese petrochemicals joint venture SECCO which could fetch more
than $2 billion, sources close to the process said.

Offers for the 50 percent stake, the British oil and gas
company's largest investment in China, will be submitted in the coming days,
the sources said.

SK Chemicals Co Ltd, a pharmaceutical unit of South Korea's
SK Group; Austrian plastics group Borealis, owned by Abu Dhabi's sovereign
wealth fund IPIC and oil and gas company OMV; and privately-owned
Switzerland-based chemicals company Ineos [INGRP.UL] are set to bid for the
asset, the sources said, speaking on condition of anonymity as the information
isn't public.

At least one other company is considering entering the
bidding round.

BP's partner in the joint venture, state-owned China
Petroleum & Chemical Corp (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 and the three potential bidders declined to comment or
were not immediately available to comment.

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

BP, like other of the world's top oil companies, is in the
midst of a divestment drive in order to focus its business and boost cash flow
in the wake of the halving of oil prices since mid-2014. It is planning sales
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.

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