The Sale of Singapore Refining Company and Retail Business
In Singapore, where the domestic market was
always small, the decision was made in 2004 to
sell the refining and retail businesses. Singapore
retained its status as the pre-eminent place in the
region to do business, with a business friendly
government, favourable terms of trade, and a
highly educated population from whom staff
of high quality could be recruited, and superb
transport and communications links to the rest
of the world. In announcing Koh’s retirement in
2003, BP described him as a “founding member
of the company’s downstream activities in
Singapore” with a “formidable reputation in the
industry in the Asia-Pacific region.” He participated
in the company’s decision to sell off its stake in
SRC and the retail business in Singapore and
Malaysia as one of his last acts in BP in 1999.
period of industry turbulence starting in 1996 when
BP closed down its 34-year-old ‘teapot’ refinery
in Pasir Panjang with the expiry of the land lease.
In 1998, crude oil prices plunged to a multi-year
low below US$10 a barrel, forcing the global oil
industry to consolidate. BP acquired Amoco, and
the following year, two of the industry’s giants,
Exxon and Mobil, merged. Shortly after, there was
a debate in BP as to whether they should sell off
its one-third in the SRC while preparing to dispose
of the downstream and other non-core businesses.
The divestment programme accelerated under
chief executive John Browne as BP underlined its
revival and credentials as an upstream company.
“The company decided to source products
from other companies instead of trying to
produce everything on its own. From the
supply viewpoint, we found that this would
be a more efficient and cost-effective
approach to meeting the needs of our
customers than owning and operating
refineries,” said Wu.
The sale of retail stations and the disappearance of
BP’s prominent green logo from the Singapore’s
landscape along with its refineries might had a
psychological and emotional effect on staff morale
and public perception. But, as it re-positioned
itself, BP assured staff, customers, contractors and
other stakeholders in Singapore that it was not
downsizing or withdrawing from Asia.
Wu Shen Kong was President and country head for
BP Singapore during the crucial transition period
between 2002 and 2006. He had developed his
career as a refinery, supply and trading professional.
In the second half of the 1990s, Singapore’s refining
industry was on the ropes, battered by growing
Thirty years after venturing into Singapore, BP
began to consider selling off some of its downstream
assets as part of a global process of consolidation
and re-organisation of the business. There was a
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