29th Jun 2007 07:05
BP PLC29 June 2007 BP AND D1 OILS FORM JOINT VENTURE TO DEVELOP JATROPHA BIODIESEL FEEDSTOCK BP and D1 Oils plc announced today that they are to form a 50/50 joint venture,to be called D1-BP Fuel Crops Limited, to accelerate the planting of Jatrophacurcas - a drought resistant, inedible oilseed bearing tree which does notcompete with food crops for good agricultural land or adversely impact therainforest - in order to make more sustainable biodiesel feedstock available ona larger scale. "This joint venture is a further milestone in our strategy to develop realavenues to contribute to global energy supplies in ways that are sustainable andprogressive," says Iain Conn, chief executive officer of BP's refining andmarketing business. "In the transportation sector, increased blending ofbiocomponents offers one of the few real options for progress. Our announcementearlier this week of a planned world scale bioethanol plant in Hull, alongside abiobutanol demonstration plant, brings widespread availability of biocomponentsfor gasoline closer to reality, and this joint venture will enable similarprogress on biodiesel." Under the terms of the agreement, BP and D1 Oils intend to invest around $160million over the next five years. D1 Oils will contribute into the jointventure their 172,000 hectares of existing plantations in India, Southern Africaand South East Asia and the joint venture will have exclusive access to theelite jatropha seedlings produced through D1 Oils' plant science programme. "As jatropha can be grown on land of lesser agricultural value with lowerirrigation requirements than many plants, it is an excellent biodieselfeedstock," said Phil New, head of BP Biofuels. "D1 Oils' progress inidentifying the most productive varieties of jatropha means that the jointventure will have access to seeds which can substantially increase jatropha oilproduction per hectare." The joint venture will focus on jatropha cultivation in South East Asia,Southern Africa, Central and South America and India. It is anticipated thatsome one million hectares will be planted over the next four years, with anestimated 300,000 hectares per year thereafter. Investments will be madethrough directly managed plantations on owned or leased land, which will alsoprovide employment for local communities, and through contract farming and seedpurchase agreements. "This is a transforming event for D1. BP's decision to join us in this newventure is a significant endorsement of our strategy to develop jatropha as aglobal raw material for the production of sustainable biodiesel," says Elliott Mannis, chief executiveofficer of D1 Oils. "It shows we have come a long way. BP's proven logistical,managerial and financial support will enable a significant enhancement andacceleration of the scope and pace of jatropha planting." Jatropha oil produced from the plantations will be used to meet both localbiodiesel requirements and for export to markets such as Europe, where domesticfeedstock produced from rapeseed and waste oil is unlikely to be sufficient tomeet anticipated regulatory led demand for biodiesel of around 11 million tonnesa year from 2010. "Once all the planned plantations are established, the joint venture is expectedto become the world's largest commercial producer of jatropha feedstock,producing up to 2 million tonnes of jatropha oil a year," says BP's Phil New. "As this hardy crop can be grown on a wide range of land types, it can make asignificant impact on employment in rural areas of developing countries whereplanting takes place, a benefit which fits well with BP's aspiration to pursuerelationships which are mutually advantageous." Notes to Editors: • Founded in 2002, UK based D1 Oils plc has been listed on theAlternative Investment Market (AIM) since October 2004. • D1 Oils plc is a UK-based global producer of biodiesel, building aglobal supply chain and network that is sustainable and delivers value from 'earth-to-engine'. Its operations cover agronomy, refining and trading andincludes pioneering the science, planting and production of inedible vegetableoils. D1 Oils also design, build, own, operate and market biodiesel refineriesand source, transport and trade seeds and seedlings, seedcake, crude vegetableoils and biodiesel. • BP, Associated British Foods and DuPont announced their intention toinvest around $400 million for the construction of a world scale bioethanolplant alongside a high technology biobutanol demonstration plant to advancedevelopment work on the next generation of biofuels on June 26, 2007. Further information: BP Press Office, London, tel: +44 (0)20 7496 4358 D1 Oils, tel: +44 (0)1642 755580 or Brunswick, tel: +44 (0)20 7404 5959 - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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