BP Amoco aims to avoid joint trouble
7 Apr 2000
BP Amoco is planning to disentangle itself from two joint ventures following restructuring at both of its partner companies. Elf Atochem's impending integration into TotalFina Elf is likely to lead to the end of the Appryl polypropylene venture, while Bayer's new focus on life sciences is likely to spell the end of the road for the basic petrochemicals manufacturer Erdolchemie.
In the case of Appryl, the break-up is likely because BP Amoco does not want a `grand alliance' with TotalFina Elf, says chief executive Bryan Sanderson. The venture is fairly complex, involving proprietary technology and three plants in the UK and France, but the companies are already studying the options for breaking up the venture. Sanderson and Mike Buzzacott, vice-president of the polymers division, favour a quick solution to the problem, perhaps with one or more of the plants being shared between the two companies.
In contrast. the Bayer joint venture Erdolchemie could become a full part of BP Amoco. Erdolchemie, which operates in both Europe and the US, converts naphtha into petrochemicals such as ethylene, ethylene oxide and polyethylene. Bayer sees the company as increasingly marginal to its activities. `If Bayer is going to exit commodities, then we would be an interested buyer,' says Buzzacott.
