Oil giant BP plc (BP) reported on Feb 28 that it has completed the farming in of entire interest in PT Amoco Mitsui PTA Indonesia ("AMI") earlier held by Japan’s Mitsui Chemicals, Inc. and Mitsui & Co. Ltd.
The partnership, which was over 15 years old, produced and marketed purified terephthalic acid (PTA) in the Republic of Indonesia. With its head office in Jakarta, and a manufacturing unit at Merak, Cilegon in the Banten province of Indonesia, AMI, is a wholly owned subsidiary of the BP group, effective Mar 1.
BP, with its operations in the USA, Europe and Asia, has a major and global presence in the PTA business. This business is supported by advanced technology. The latest transaction is in sync with the company’s strategy to be a leading PTA player in markets in which it chooses to compete.
This PTA plant in Indonesia is advantageously positioned as the domestic demand for PTA in the region has grown about 6% over the last few years. The deal facilitates BP to evaluate future prospects for expansion and lower the cost of production facilities by upgrading to its latest technology.
With presence of over 45 years, BP has become one of the largest foreign investors in the country. This transaction does not affect any of BP’s businesses in Indonesia and AMI will continue to supply PTA to the Indonesian market.
Commissioned in 1997, AMI’s PTA plant has an annual production capacity of 525,000 tons.
BP currently carries a Zacks Rank #3 (Hold). Other stocks in the oil and gas sector such as Helmerich & Payne, Inc. (HP), Matrix Service Company (MTRX) and Patterson-UTI Energy Inc. (PTEN) with a Zacks Rank #1 (Strong Buy) are expected to outperform.
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