Corrected: BP to continue China, India chems investments

21 October 2008 16:11  [Source: ICIS news]

Correction: In the ICIS news story headlined "BP to continue China, India chems investments" dated 21 October 2008, please read in the tenth paragraph ...900,000 tonne/year purified terephthalic acid (PTA) plant... instead of ... 90,000 tonne/year purified terephthalic acid (PTA) plant.... A corrected story follows.

By Hilde Ovrebekk

LONDON (ICIS news)--BP will continue to grow its petrochemicals business through investments in India and China but the economic slowdown may affect investments in debottlenecks, a company official said on Tuesday.

Speaking at a meeting with journalists, Steven Welch, chief operating officer, international businesses refining and marketing segment, said that despite a global collapse in demand, China and India would continue to grow faster than the rest of the world.

“We are quite comfortable investing in the right opportunities,” said Welch.

He said that China was growing at a much slower rate than it has in previous years, but that from an investment standpoint it was a multi-year decision.

He added that BP would also be interested in the right opportunity in India.

“We have had a number of conversations there, some more advanced,” said Welch.

“It is more interesting to invest in a growing market to use the capability of downstream,” he added.

BP has been a net investor in the chemicals business in recent years, said Welch.

“Right now, BP’s petrochemicals division is benefiting from the Zhuhai project and can sell into the market profitably where others have difficulty,” he added.

The company started up a 900,000 tonne/year purified terephthalic acid (PTA) plant in Zhuhai, Guangdong province in China, earlier this year, completing the second phase of a project for Zhuhai Biyang Chemical, a joint venture between BP and Zhuhai Fuhua Group.

However, in the US and Europe the company is now dealing with the initial significant slowdown, which started in the middle of the year and has accelerated.

“Not everyone has been willing to invest the way we have,” said Welch.

At Geel in Belgium the company recently debottlenecked its plant and expanded PTA capacity by 30% to 1.35-1.40m tonnes/year.

“In the US we have enough capacity. We are well positioned to expand but now isn’t the right time,” said Welch.

However, a potential prolonged economic slowdown would affect debottleneckings, said Welch.

“Because of the immediate slowdown, if growth is zero or negative in 2009, we will time the plans differently,” he added.

Welch said the company was also in a strong position for an acquisition and would be interested in the right opportunities.

 

“Buying at the right time is very important,” he said, adding that the company had been looking at a couple of opportunities over the last six months, but had decided not to do anything.

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By: Hilde Ovrebekk
+44 20 8652 3214

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