Reliance Industries in talks buy BP’s Malaysia plant

Reliance Industries in talks to buy BP’s Malaysia plant

5:17 AM, 17th August 2012
Reliance Industries in talks to buy BP’s Malaysia plant

MUMBAI, INDIA: India’s largest private sector company, Reliance Industries (RIL) is in talks with British oil giant, British Petroleum (BP) to buy its petrochemicals plant in Malaysia, said a media report in the country. The company seeks to replicate its domestic success in building fully integrated operations in all its businesses, it added. RIL has held talks with BP officials in Hong Kong about the 610,000-tonne PTA plant in Malaysia. “Serious discussions are happening,” said an Investment Banker with direct knowledge of the matter, speaking to the Indian newspaper, the Economic Times. Both BP and RIL did not comment on the market news.

The plant may not be worth much (about Rs 2500 million ($45.5 million) is the estimate from independent industry executives), but it could ensure that RIL’s operations in Malaysia are fully integrated, similar to those in India. RIL’s Malaysia assets were bought from Hualon, the South-East Asian nation’s largest polyester maker, in 2007 when polyester profit margins had plummeted. The acquisition of the PTA plant in Kuantan - located in the state of Pahang on the east coast of Malaysian peninsula - will help RIL integrate it with Hualon’s polyester capacities. The world’s largest polyester producer is currently buying PTA from local producers.

The move seems to be a part of BP’s target of $38 billion in disposals by the end of next year to help pay the costs of the Macondo well blowout in the Gulf of Mexico. The deepwater well blowout in 2010 had killed 11 and unleashed the worst offshore spill in US history. Untill now, BP has sold or agreed to sell assets worth $26.5 billion since 2010. Further, BP plans to divest another $14 billion of assets by the end of next year.

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