BP has agreed to divest its 50% interest in Shanghai SECCO Petrochemical Company (SECCO) to a subsidiary of its joint venture partner Sinopec for $1.68bn.

Sinopec and Sinopec Shanghai Petrochemical Company (SSPC) hold 30% and 20% stake in SECCO.

Gaoqiao Petrochemical, a 100%-owned unit of Sinopec, is buying the BP's stake.

SECCO was founded in 2001 with an investment of about $2.7bn from the three firms BP, Sinopec and SSPC. The joint venture has eight major production plants which includes a 1,090 ktpa ethylene cracking plant.

Headquartered in Shanghai, SECCO is engaged in the production of olefins like ethylene and propylene along with polymers and other derivatives such as polyethylene, polypropylene, polystyrene, butadiene, acrylonitrile styrene among other products.

BP global petrochemicals chief operating officer Rita Griffin said: “This decision aligns our petrochemicals business in China with our global focus on areas where BP has leading proprietary technologies and competitive advantage.

“China is a key region for our chemicals business and BP will continue to look for opportunities to build on our position in the country.”

BP China president Xiaoping Yang said: “China is a country of great significance to BP given its market potential.

“BP has been committed to doing business in China for more than four decades. Looking into the future, we plan to continue to invest in China in areas that provide the best growth opportunities for BP, our Chinese partners and the country.”

Subject to receipt of various regulatory approvals and meeting of other conditions, the transaction expected to be closed by the year end. As per the terms, the acquisition amount to BP will be paid in installments.

Image: BP's world headquarters in St. James's, City of Westminster, London. Photo: courtesy of WhisperToMe/Wikipedia.org.