The retail team that managed BP service stations in the 90s.
overcapacity in the region and a steadily rising tide
of red ink as oil demand and prices fell. Wu had
a strong attachment to SRC as he was deeply
involved in its conception and implementation as
a joint venture with the SPC and Caltex in 1979,
and also involved in the S$1.4 billion investment
to expand base capacity and building of new
upgrading units to increase supply in 1996.
After reviewing various research findings and
industry data, it has been concluded that BP
could not justify holding onto its stake in SRC,
even though it had been profitable since start-up.
It was consistently rated among the company’s
best performing worldwide. “But we had to sell. It
came down to a matter of when and who to sell
it to,” Wu said. Several parties expressed interest,
but it would take another five years of intense
negotiations with numerous potential buyers
before BP concluded the sale of its SRC stake
and retail stations to SPC in 2004.
Just three years after that, BP took a broader view
of the global supply situation and concluded it
owned too much refining capacity and not enough
oil and gas reserves. Furthermore, BP’s purchase
of the integrated US oil firm Amoco in 1998 for
its upstream assets had the undesired effect of
adding to the group’s refining capacity.
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