BP exploring a new venture in China?

14-Oct-05

BP Plc, Europe's largest oil company, has been keeping in regular contact with major oil companies in China such as Sinopec and China National Offshore Oil Corp (CNOOC) for further co-operation. Is this an indication of a big venture being planned by the oil major in China? Since its initial focus in the 1970s, BP has a total investment in China of more than US$3 billion in commercial projects. A partnership with Sinopec could be in the presumably for oil or gas fields or expertise in a joint venture. BP could accelerate growth in China to take advantage of surging energy demands. China is the world's second-largest oil consumer and one of the fastest-growing markets for energy and petrochemicals. Its energy market is dominated by state-controlled oil firms and its growing importance poses a threat to the western major oil companies, whose strength has been based partly on unrivalled access to the biggest energy markets. Meanwhile, it is indicated that China has rebuffed a bid by oil giant BP Plc to take "a very substantial stake" in China's largest oil refiner and fuel marketer, Sinopec Corp. Though China is desperate to secure access to energy resources for its booming economy, it is not yet ready to relinquish a significant share of the nation's downstream refining and fuel-marketing industries to help achieve this.