BP To Sell Stake In SECCO To Sinopec Unit For $1.68 Billion

Energy giant BP (LON:BP) Plc (NYSE:BP) recently declared that it has inked an agreement to divest its 50% stake in Shanghai SECCO Petrochemical Company Limited to China Petroleum & Chemical Corporation or Sinopec's (NYSE:SNP) subsidiary, Gaoqiao Petrochemical Co Ltd., for $1.68 billion.

SECCO is currently owned by three companies of which BP is the majority stakeholder (50%). The other two companies are Sinopec and SINOPEC Shangai Petrochemical Company, Ltd. (NYSE:SHI) , holding 30% and 20%, respectively. SECCO manufactures petrochemicals that are sold in both domestic and international markets.

BP plans to use the proceeds from the transaction – expected to be completed in the current year – for general corporate purposes. The deal is dependent on the fulfillment regulatory approvals.

BP considers China as an important region for its chemicals business, in spite of the divestment of its stake in SECCO. The company will keep looking for further opportunities in the country.

About the Company

BP is the holding company of one of the world's largest petroleum and petrochemicals groups. The company is primarily engaged in the exploration and production of crude oil and natural gas. It is also involved in the refining, marketing, supply and transportation, as well as manufacturing and marketing of petrochemicals. The London-based company is also increasing its activities in gas, power, and solar power generation.

Price Performance

BP’s shares underperformed the Zacks categorized Oil & Gas-International-Integrated industry in the last three months. During this period, the industry witnessed a decrease of 3.94%, while BP’s shares lost 4.08%.

Zacks Rank and Stocks to Consider

BP presently carries a Zacks Rank #5 (Strong Sell). A better-ranked stock in oil and gas sector is Antero Resources Corporation (NYSE:AR) , it carries a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Antero Resources is expected to 7.82% year-over-year earnings growth in 2017. The company posted a positive earnings surprise of 23.08% in the last quarter of 2016.

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