Shanghai: China Petroleum & Chemical Corp said BP 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 yesterday, without naming the ventures.
"We aren't in any talks with BP right now."
Europe's largest oil producer by volume plans to dispose of as much as $30 billion (Dh110 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 amid 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.
"Expect Sinopec and others to come back to BP with higher bids."
The London-based company is considering selling fields in Colombia, Venez-uela and Vietnam, a person with knowledge of the matter said this month.
BP may also dispose of its 60 per cent holding in Pan American Energy, 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 on Thursday, down 37 per cent since the blast.
Strategic resources
China has spent at least $21 billion on overseas resources in the past year to meet domestic demand, including the acquisition in April of a stake in a Canadian oil-sands project by Sinopec's parent. The world's largest energy-consumer relied on imports to meet more than half of its oil needs in 2009.
"The chances of Sinopec winning bids for BP assets are small, as the European company is in the hands of the UK and US government and would never give strategic resources to Chinese majors easily," said He Wei, oil analyst with Bocom International Holdings.
Sinopec has fallen 10 per cent in Hong Kong trading this year, compared with the 4 per cent decline in the benchmark Hang Seng Index. The stock rose 0.2 per cent to close at HK$6.26.
The slowing Chinese economy hasn't affected domestic oil product demand so far, Zhang said. "We cannot see much impact right now," he said.
Sinopec's daily fuel sales haven't declined and the company's refineries are operating at more than 90 per cent of their designed capacities, Zhang said.
The Beijing-based refiner supplies 60 per cent of the country's oil products including gasoline and diesel.
Fuel demand is poised to slow as Premier Wen Jiabao damps growth to curb inflation.
The economy may grow 10.1 per cent this year, according to the median of 27 economists' forecasts compiled by Bloomberg, down from last year's 10.7 per cent.
Legal minds tussle on how to merge lawsuits
More than 3,200km from the Gulf of Mexico shoreline, a panel of US judges heard arguments from lawyers on Thursday on how piles of oil spill-related lawsuits against BP should be merged.
The panel, meeting in Boise, Idaho, as part of its regularly scheduled rotation among federal courts, did not immediately rule on how it would handle the mounting civil litigation brought against BP and other defendants involved in the worst offshore oil disaster in US history.
A decision is expected within several weeks.
At stake is whether civil lawsuits from injured rig workers, fishermen, property owners, investors and others will be combined in Houston, where BP has its US headquarters and wants the cases heard, or New Orleans, the preferred venue for many plaintiffs — or elsewhere. Some lawyers argue the litigation is too massive for any one court to handle.
The environmental havoc wreaked by the oil rig explosion that killed 11 workers could take years to reverse. A temporary cap has halted the gusher a mile below the sea's surface while crews try to plug the well for good this week, but the massive spill has wrecked the Gulf's fishing and tourism industries.
