BP in talks with China on refinery ventures
July 27, 2009
BP Plc reportedly is in talks with China to build large refineries in coastal cities, representing a renewed attempt by a foreign company to push into the world''s second-biggest oil market when demand in other countries is mostly falling, reports MarketWatch. The British oil major is negotiating with China''s Sinopec for a refinery in southern cities of Beihai or Zhanjiang, the China Daily reported, citing an unnamed source. The company is also working with PetroChina to build a plant in Shanghai. China has become about the only global bright spot for oil consumption as the economic downturn slashed demand in developed countries. The nation''s oil demand is expected to rise to 7.98 million barrels a day this year, up from last year''s 7.89 million, according to the International Energy Agency. Global oil demand is expected to fall in 2009 for the second straight year, largely due to declining consumption in Organization for Economic Cooperation and Development countries. The U.S., the world''s biggest petroleum consumer, hasn''t built a new refinery in 30 years. Under China''s petrochemical stimulus plan, the country will build three or four refining bases, each of which would have a minimum refining capacity of 20 million metric tons a year, or about 400,000 barrels a day. China has long kept oil refining markets confined to Sinopec and PetroChina, the country''s two biggest oil companies. Only Exxon Mobil Corp., Saudi Aramco and France''s Total SA own parts of two of the mainland''s 120 refineries. BP, the world''s third-biggest oil company by revenue, has a total investment of $4.6 billion in China. The company is working with both PetroChina and Sinopec to operate 500 service stations in China''s two coastal provinces, Zhejiang and Guangdong. BP also runs an ethylene plant in partnership with Sinopec with a capacity of 900,000 metric tons a year.