BP Plc Wednesday reported it had agreed to the purchase of its interests in ethylene and polyethylene manufacture in Malaysia by Brazilian company, Petronas. BP Plc, the British oil giant said the deal will see Petronas remit $363 million in cash. BP said it had agreed on the sale of 15% of its stake holding in Ethylene Malaysia Sdn Bhd (EMSB) and an additional 60% in Polyethylene Malaysia Sdn (PEMSB). However, the two acquisitions, currently operated by Petronas, will not impact BP’s other Malaysian businesses, said the firm.

Other than that, the $363 million investment will as well include a balance sheet adjustment of $13 million and the repayment of a shareholder loan pegged at $53 million. BP stands to get an additional EMSB per-closing dividend payment pegged at $48 million, subject to approval, said the British oil giant. The two oil majors hope to conclude the transaction by the end of 2010. Sue Rataj, BP’s Global Petrochemicals Business president, said the firm is keen on the development and expansion of its olefins and derivatives business in China, and other big rapidly burgeoning markets and is shifting its focus to the same.

In that regard, Rataj said BP will continue pursuing opportunities in China and India in order to extend its leading global placement in aromatics and acetyls, her statement read. The British oil giant is currently growing its Asian Business Service Center in Kuala Lumpur, Malaysia. The center supports business and functional operations both regionally and worldwide. Currently, BP employs over 850 persons in Malaysia and owns a 600,000 tons per annum purified terephthalic acid plant in Kuantan. It as well has a 70% interest in a 560,000 tons per annum acetic acid plant in Kertih.

Other than the two, BP also owns a Lubricants plant at Port Klang and its brands such as Castrol, BP and Duckhams have a considerable share of the Malaysian market. EMSB, with a production capacity of 440,000 tons per annum of ethylene is 72.5% owned by Petronas with BP holding 15% interest and Idemitsu owning 12.5% stake. On its part, PEMSB has a production capacity of 318,000 tons per annum of polyethylene used for packaging and film manufacture.

BP plc owns 60% of PEMSB while the remaining 40% is owned by Petronas. The Ethylene feedstock for the plant is supplied by EMSB.

1 Sep 2010.