24th Apr 2008 14:58
BP PLC24 April 2008 April 24, 2008 BP, SANTELISA VALE, AND MAEDA UNVEIL PLANS TO INVEST R$1.66 BILLION IN BIOFUELS BP announced today that it intends to take a 50 per cent stake in TropicalBioEnergia SA, a joint venture established by Brazilian companies Santelisa Valeand Maeda Group, which is constructing a 435 million litre (115 million USgallons) a year ethanol refinery in Edeia, Goias State, Brazil. The joint venture, in which Santelisa Vale and Maeda Group would each hold 25per cent, also intends to progress plans to build a second ethanol refinery,investing a total of approximately R$1.66 billion (US$1 billion) in the tworefineries. Assuming all the required approvals are received, BP will pay around R$100million (US$59.8 million) for the 50 per cent stake, subject to working capitaladjustments, and provide funding for agreed future investment in line with itsshareholding. The parties said that they hoped to be able to complete thetransaction before the end of June 2008. "This investment, the largest made by an international oil company in theBrazilian ethanol industry, represents a significant step in delivering BP'sstrategy for biofuels which centres around sustainable feedstocks that do notimpact on food supplies, and investing in research work to develop thetechnologies required to produce advanced biofuels," commented Phil New, head ofBP Biofuels. "BP is delighted to be partnering with two Brazilian companies withleading positions in their sectors and we look forward to a long relationshipwith them." The joint venture will focus on potential sugarcane production and themanufacturing and marketing of conventional ethanol, including the associatedagricultural assets and cogeneration plants. Sugarcane is the most efficientsource of biofuel currently available. Sugarcane lends itself to furtherimprovement through the use of advanced biofuels technology and will thereforebe a compelling source of renewable fuel for the foreseeable future. It providesa greenhouse gas emissions reduction of up to 80 per cent. Operations at the first refinery are expected to commence during the second halfof 2008, with full capacity anticipated by mid-2010. The refineries will bepositioned to supply the Brazilian ethanol markets with the potential to exportto the demand markets of US, Europe and Asia. Besides developing sustainable biofuels, the refineries are expected to be ableto sell surplus electricity, with each of them exporting at least 30 MW ofsurplus power from integrated bagasse cogeneration facilities. The facilitiesare also intended to offer a potential platform for deploying futuretechnologies such as lignocellulosics and biobutanol. The Maeda Group is one of the largest cotton producers in the world. "BP'sdecision to join Tropical Bioenergia in this new venture is significant," saidJorge Maeda, chief executive officer of Maeda Group. "Today we are demonstratinghow Maeda's unique agriculture expertise, attendant network of relationships,and knowledge of the region's soils, climate and rural labor conditions combinedwith Santelisa Vale's sugarcane expertise can provide sustainable renewable andreliable solutions for fuel." Santelisa Vale Group is the second-largest sugar cane crusher in Brazil and thefirst in energy cogeneration from bagasse. As it already operates a number ofethanol refineries, Santelisa Vale has expertise along the entire value chain ofethanol/sugar production. "BP's proven logistical, technological and fuel supply chain experience willenable a significant enhancement of our strategic plans," noted Anselmo LopesRodrigues, chief executive officer of Santelisa Vale. Notes to editors: • Transport accounts for around 21 per cent of all carbon dioxide emissions. • BP is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. It is the largest oil and gas producer in the U.S. and one of the largest refiners. BP also has a global network of around 25,000 service stations. • BP is a leading player in the global biofuels market. In the US, BP has blended and distributed 763 million US gallons of ethanol and about 1 million US gallons of biodiesel in 2007. In Europe, BP sold 344 million litres of ethanol and 847 million litres of biodiesel in 2007. BP's sales of biofuels in 2007 accounted for about 10 per cent of the global biofuels market • Maeda Group is recognized worldwide as being one of the most vertically integrated players in the cotton value chain with 80 years in the industry. The company has one of the few cotton seed crushing businesses in Brazil, producing several products from cotton seeds: vegetable oil, which contains no "trans fat" and is used as input in the food industry; linter (the material around the cotton seeds), used for special products such as money paper and LCD screens; and cotton seed meal, used as animal feed. • Santelisa Vale, Brazil's second largest sugar and ethanol producer and first in energy cogeneration from bagasse, expects to crush 18 million tons of sugar cane in 2008. The company will produce 25 million bags of sugar and 770 million litres of ethanol. Santelisa Vale also produces and sells a surplus of 420,000 Mwh of electricity from sugar cane bagasse - enough to supply a population of one million per year. The company, with over 70 years of history, is a leader in technology and innovation within the segment. • Santelisa Vale and Maeda Group were advised by ING Bank. Further information: • BP Press Office, London, tel: +44 (0)207 496 4076 • BP U.S. Press Office, Chicago, Tel: +1 630 821 3206 • BP Brazilian Office, Campinas, tel +55 19 3794 8357 • Maeda Press Office, tel: +55 11 2179 7380 • Santelisa Vale Press Office, tel: +55 16 3946-3924 or email: [email protected] • Ketchum Estrategia Assessoria de Comunicacao Rafael Presilli / Adriana Toledo, tel:(11) 5096-4334 ext. 212/280 or [email protected] / [email protected] - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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