Brazilian JV takes BP upstream in ethanol (Corporate Dealmaker)

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Brazilian JV takes BP upstream in ethanol

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BP plc said it would pay around 100 million reais ($59.8 million) for a 50% stake in Tropical BioEnergia SA, a joint venture established by Brazilian companies Santelisa Vale and Maeda Group. The Brazilian firms would each own 25% of the JV, which will focus on sugarcane production and the manufacturing and marketing of conventional ethanol. The firms involved also plan to build a second ethanol refinery, investing a total of approximately R$1.66 billion in both refineries.

Maeda Group has extensive knowledge of the land as one of the largest cotton producers in the world, while Santelisa Vale is the second-largest sugarcane crusher in Brazil and the first in energy cogeneration from bagasse, or sugarcane pulp.

BP purchases ethanol, but has never ventured into the production of it. Phil New, head of BP Biofuels, told Times Online the investment was analogous to the oil industry and BP's strategy of securing control of the supply at the wellhead.

And thanks to high crude and natural gas prices, BP Tuesday reported an almost 50% jump in "replacement cost profit" to $6.6 billion for the most recent quarter. - Baz Hiralal

Read about the Tropical BioEnergia JV
Go to the Tropical JV story from Times Online
See the first-quarter 2008 results for BP

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Comments

From: david j phillips,

Sadly, the BP-Brazil deal underscores that the U.S. consumer continues to be held hostage--if not by oil members of OPEC, then by U.S. ethanol producers, backed by corn & sugar lobbies, who gorge us with their bullsh*t that corn is preferred feedstock over sugar cane or grasses [for their own egoistic reasons]!

http://industry.bnet.com/energy/2008/05/01/bp-makes-brazilian-play-for-ethanol/

Best-
David J Phillips
Energy Columnist, BNET

Posted on: May 2, 2008 12:14 AM

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