BP to exit stake in jatropha biofuel joint venture with D1 Oils

17 July 2009

Biofuel producer D1 Oils has announced that it will acquire BP’s 50 per cent interest in D1-BP Fuel Crops, a joint venture for planting jatropha curcas, a biodiesel source crop.

BP and D1 Oils formed the joint venture in June 2007.

Under the terms of the agreement, D1 Oils will purchase BP’s shares at a significant discount to D1-BP Fuel Crops’s net asset value and will provide a limited £0.5m cash outlay. The company will assume all of the joint venture’s assets and liabilities and will take responsibility for any third-party claims against the BP group related to the venture.

Ben Good, CEO, D1 Oils, said, ‘This agreement enables us to bring all existing Jatropha planting assets and interests back under full D1 control while retaining an alignment of interest on Jatropha with BP. This has been achieved in exchange for a low cash outlay. Unified ownership and management will give us the ability to reduce cash burn, and be more flexible and responsive in developing the business. We are now moving forward rapidly with the restructuring of the business to achieve our three objectives: achieving value from existing planting, building technology and services revenues, and delivering a focused science and technology.’

The transaction will end the exclusive supply relationship between D1’s plant science business and D1-BP Fuel Crops, thereby enabling D1 to market its products and expertise to third-parties. However, D1 Oils will pay £30 to BP for each of the first 20,000 tonnes of oil sold to third parties.

As a part of the agreement, BP will retain an interest in D1’s planting activities through an extension and amendment of the existing option and relationship agreement. The parties have also agreed to maintain an ongoing dialogue in relation to the potential supply of crude Jatropha oil to BP.

Copyright © 2009 NewNet

Tags: biodiesel, biofuel, jatropha

This story was published on Friday, July 17th, 2009 at 4:38 pm and is filed under biomass/biofuel, companies. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply