BP sells some Malaysian assets

Integrated oil giant BP has agreed to sell all its interests in purified terephthalic acid (PTA) production in Malaysia to Reliance Global Holdings.

Reliance has agreed to purchase BP's interest in BP Chemicals (Malaysia) Sdn Bhd (BPCM), located at Kuantan on the east coast of Malaysia, for $230m in cash.

The deal is expected to complete before the end of the year. All current staff of BPCM are expected to transfer to the new owners under equivalent terms and conditions. BP's acetic acid manufacturing and marketing business in Malaysia is unaffected by this sale.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

James Yim, head of BP's aromatics business in Asia, said: "RECRON Malaysia, part of the Reliance Group, is already our largest customer in Malaysia and Reliance Industries is a significant feedstock supplier at Kuantan, so Reliance is a natural owner of this plant."

BP accounts for around one fifth of global PTA production capacity and reaffirmed its commitment to the market. "We will continue to concentrate our PTA strategy on deploying new technologies into high growth markets like China where we are in the middle of a considerable expansion programme, and in OECD markets where our technology gives us an advantage and high utilisation rates," said Nick Elmslie, Chief Executive of BP Petrochemicals

"We are also building new revenue streams by licensing our PTA and paraxylene technologies," he added.

JH