Energy

BP has declined Sinopec's offer to buy its assets

(Agencies)
Updated: 2010-07-30 14:54

China Petroleum & Chemical Corp (Sinopec), Asia's biggest refiner, said BP Plc has declined an offer by the Chinese company to buy some of its assets.

"We've talked to BP on some good assets, but they won't sell," Zhang Jianhua, senior vice president of the company known as Sinopec, said in an interview in Shanghai today, without naming the ventures. "We aren't in any talks with BP right now."

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Europe's largest oil producer by volume plans to dispose of as much as $30 billion in assets in the next 18 months to raise cash to meet the costs of the Gulf of Mexico oil spill. BP said it has $16 billion of unused credit lines and plans to cut its debt to as little as $10 billion over the same period.

"BP's robust cash flow amidst resilient oil prices means they don't have to sell assets at dirt-cheap levels, especially for higher-quality assets," said Gordon Kwan, head of regional energy research at Mirae Asset Securities Ltd. "Expect Sinopec and others to come back to BP with higher bids."

The London-based company is considering selling fields in Colombia, Venezuela and Vietnam, a person with knowledge of the matter said this month. BP may also dispose of its 60 percent holding in Pan American Energy LLC, Argentina's second-largest oil producer, the person said then.

BP reported a record loss in the second quarter after the oil spill triggered by an April 20 explosion on the Deepwater Horizon rig. The shares closed at 413.45 pence in London trading yesterday, down 37 percent since the blast.