BP
plans to sell over 50 per cent of petrochemicals business and prepares
for IPO
Posted: 27 April 2004
BP plans to consolidate the Olefins and Derivatives (O&D) division
of its petrochemicals business into a stand-alone entity able to
operate separately from the BP Group.
The new O&D business will incorporate more than half of the
$13 billion of operating capital employed in BP’s petrochemicals
portfolio, giving it the scale to be a major independent player
in the global petrochemicals sector.
It will be headed by Ralph Alexander, who was today named as chief
executive of BP’s petrochemicals business with effect from
July 1, 2004.
BP said it plans to sell O&D in due course, possibly through
an Initial Public Offering, depending on market circumstances and
necessary approvals, in the second half of 2005.
The Group intends to retain the balance of its petrochemicals portfolio,
comprising the aromatics and acetyls businesses. BP views these
as “advantaged products” where BP has leading proprietary
technology and strong positions in growing Asian markets.
Lord Browne spelt out BP’s determination to tackle the continuing
poor returns of its petrochemicals segment overall at a strategy
presentation to investors in London and New York last month.
He said future investment would focus more on paraxylene, PTA and
acetic acid, and less on olefins and derivatives which form the
bulk of BP’s petrochemical operations in Europe.
"We have now concluded that divesting O&D – perhaps
by means of an IPO, subject to market conditions and any necessary
consents – is likely to deliver the best returns to our shareholders
and to be in the best long-term interests of the O&D business
itself,” Browne said today.
Current chief executive of BP Petrochemicals, Iain Conn, said:
“Our O&D sub-segment is one of the highest-quality portfolios
of its kind in the petrochemicals industry.
It has a global network of manufacturing sites, good technology,
a fine range of products and strong market positions. As a free-standing
entity it will be a significant competitor in its sector.”
Fore more information see www.bp.com
Posted by Richard Price,
Editor Pipeline Magazine
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