BP offloads Singapore refineries

ONE OF Asia's biggest oil and gas players, Singapore Petroleum (SPC), has agreed to buy British Petroleum refining assets in Singapore for US$140m (£75m.

The acquisition will double SPC's refining capacity and strengthen its position as a leading supplier of quality petroleum products in Asia Pacific, the company said.

SPC, a unit of Keppel Corporation, said demand in Asia for petroleum products and transport fuels in particular was expected to increase in line with the region's robust economic growth.

It will acquire BP Singapore's 33% equity interest in Singapore Refining Company as well as its 16% equity interest in Tanker Mooring Services.

SPC said the acquisition, to be funded by bank borrowing, would contribute pre-tax profits of S$26.1m (£8.2m).

As part of the deal, SPC would also buy all BP Singapore's interest in crude and product inventories at agreed market prices on completion of the transaction, expected by the end of June.

The deal is a breakthrough for SPC, which has been frustrated by limited expansion in refining capacity. BP, which has extensive petrol-station interests in Singapore, is believed to be on the lookout for opportunities in Indonesia as its market is deregulated.