Stephen Chow, vice president of BP LPG and chief representative of Shanghai office, has been in the international energy business for 20 years. Prior to Shanghai, he has worked in Hong Kong, Singapore and New York. He is a graduate of Taiwan university and Columbia business school.

Q: Could you briefly outline your current role in BP?
A: I’m responsible for BP’s East China LPG portfolio. We have 4 major joint ventures strategically positioned along the coastal area; i.e.; Zhuhai, Fuzhou, Taicang plus a to- be-commissioned facility in Ningbo. The Ningbo venture will be the very largest underground storage cavern in China – a project worth $100 million. BP is the largest foreign investor in China LPG business.

Q: What is the role of the Shanghai office in relation to BP China as a whole?
A: BP has three major offices in China – Beijing, Guangzhou and Shanghai, in addition to many JV manufacturing locations. Beijing is the headquarters. Guangzhou is the focus of downstream business, whereas the Shanghai office is a combination of 4 business streams – Gas and Power, Lubricants, Chemicals and LPG, functioning as the nerve centre for our East China operations.

Q: Who are your Chinese partners and how well are the collaborations working?
A: BP has many Chinese partners! The three major ones we have signed mega deals with are the industry giants – Sinopec, PetroChina and CNOOC.

BP supported Sinopec’s international IPO (Initial Public Offering) in 2000. In addition to that there’s an Ethylene JV project in Shanghai and an Acetic Acid JV plant in Chongqing. In the same year, we supported Petrochina’s IPO and have jointly developed downstream retail business in Guangdong province involving hundreds of petrol stations. If you visit Guangdong, you’re going to see a lot of Helios signs (the BP logo) very soon! There is also CNOOC, our JV partner for China’s first LNG (liquefied natural gas) receiving terminal in Shenzhen.

In the LPG business, we have Huaneng, China’s largest power generation company as well as many local gas companies as our partners. Like all the JVs, managing the partner relationships requires a lot of mutual trust, respect and hard work. BP has been very successful in balancing these factors and we aspire to be the partner of choice for these leading Chinese companies.

Q: How are the strengths of the two companies coming together in the joint ventures?
A: BP is bringing its international management expertise, a globally recognized brand and capital commitment, over $3 billion across the businesses in China, a figure that is ever increasing. Our Chinese partners provide their market reach, assets, talented people and local relationships. That’s the general rule of game while each individual joint venture has its own unique attributes.

Q: How is the slow down in world markets impacting BP’s investment plans in China, especially in the large petrochemical plants?
A: BP is committed to be a key player and industry driving force in China. The slowing down of the global economy has an impact on the pace of our investment but it will not affect the strategic direction we’re going in. Looking at the big picture, China maintains a growth rate of 7%, whereas the surrounding areas are struggling to get out of recession. We are fully convinced that we want to be a long term, large player, otherwise we should not be in this business at all.

Q: The needs of the Chinese market differ so much from those of the western market, how is BP trying to tailor its products to suit the Chinese market?
A: There are cultural, structural and business practice differences between these markets but the gaps are narrowing quickly when the industry is starting to open up. Take LPG for example, we cover a wide spectrum of the product value chain, from basic commodity import all the way to consumer goods. At the commodity level, we bring international sourcing expertise and logistical efficiency to lower the cost. At the consumer level, i.e. bottle gas and autogas station, we bring in quality product and services emphasizing health, safety and environment practices catering to the consumer’s benefit. We know that change does not happen overnight, but those extra steps that we take will make the difference to set the pace and standard for the business.

Q: Is the market relatively stable for your projects?
A: The market fluctuates tremendously – not only the price, which has linkage to the changing international and domestic supply and demand, but also the dynamic Chinese business environment. There is always something new around the corner. However, that is what makes life interesting.

Q: BP has got quite a well renowned community spirit, there’s a lot of environmental concern and concern about the general public, how has this been implemented in Shanghai?
A: To promote clean energy and better air quality in the Shanghai, our Taicang JV supplies LPG for Shanghai’s taxis. Along with that we provide training to the LPG autogas filling stations, to educate employees and customers on how to act safely. As far as the community activity goes, we are involved in ‘Project Hope’ with schools in different cities China-wide. We support culture events and have provided office space for community project ‘care-for-children’ workers in Shanghai.

Q: You’re usually quite keen to recruit and develop local staff; is that also the case in Shanghai?
A: Yes, BP has a very diversified work force. I’d say over 90% of our employees are locals. Some are directly from school such as China European International Business School (CEIBS) in Shanghai. Some are experienced in similar trades when they joined BP. There are also many talented employees hired by our JVs or seconded by the Chinese partners. BP provided lots of formal and on-job training to progress employees. We also move people across business streams and among different geographical locations, both within China and internationally.

Q: BP’s development has recently escalated in China, what in your opinion are the big milestones in Shanghai and China as a whole?
A: The first milestone will be in this coming summer – the $100 million LPG project commissioning in Ningbo. 2003/4 will be the years for hundreds of petrol stations in Guangdong and East China. Then BP Chemicals will have the Ethylene joint venture with Sinopec in Shanghai. From 2004 and beyond, there are PTA plant in Zhuhai and LNG receiving terminal in Shenzhen. A lot of things are going on!

In the next couple of years the only thing you can be sure of is ‘Change’! To manage that change requires a lot of commitment, passion, resilience and understanding of both global and local markets. I think China is probably one of the most exciting places on the planet for BP.