BP reportedly drops China refinery plan

January 31, 2014

BP (BP.L) is dropping plans to invest in a refinery in China, three sources with direct knowledge said, the fourth refining project in recent months to fall foul of a slowdown in growth in the world's second-largest economy, Reuters reported on January 30.

"There is growing concern of an over-supplied China market, so BP is taking its precautions," said one oil industry executive, who declined to be named as he was not authorised by his company to speak to the media.

BP is dismantling the 20-strong Beijing-based team tasked with studying the feasibility of taking a stake in a refinery in the southern coastal city of Qinzhou, the sources said.

The team is being reassigned after around two years working on the project to invest in the 200,000 barrels-per-day plant, run by China's second-largest refinery operator, state-run PetroChina.

PetroChina is currently upgrading the plant to handle a wider variety of crude. The plant cost $2.5 billion to build and started operating in late 2010.

Both BP and PetroChina spokesmen declined to comment.

Copyright: Reuters, 2014