BP to renounce trading in most petrochemicals in Asia

01-Oct-08

Terming the trading of petrochemicals as incompatible with its plans, BP has arrived at a decision to discontinue trading in most petrochemicals. BP's petrochemical trading team will be acquired by China Aviation Oil (CAO). CAO, thus far, focused on importing jet fuel into China, will start trading petrochemicals in Q4 of this year. Chinese state-backed CAO plans to fund the working capital requirements of the petrochemicals trading business using internal resources. Its immediate priorities include strengthening internal operational systems, growing the business and securing contracts for 2009. CAO has been presented with the opportunity to inherit BP's Asia petrochemicals portfolio and team. BP's experienced petrochemicals trading team has a proven track record, rendering it easier and more effective for CAO than to initiate the process of building up a team. CAO's petrochemicals team will have two traders initially, including Lim Fang Wei, who was BP IST-EH Petrochemicals book leader and has joined CAO as team leader of Petrochemicals Trading. CAO's profits from the petrochemicals trading business are expected to be miniscule for current financial year and are expected to ramp up in 2009- as trading business is estimated to be lucrative due to key growth region for petrochemical products -China and India.