Saturday, 30 June 2007

BP and D1 Oils launch jatropha joint venture to produce biofuel

Oil giant BP and AIM-listed UK biofuels company D1 Oils said they’ve agreed to establish a ‘global’ joint venture to grow jatropha for use in biofuels.
Jatropha, an oilseed tree found in tropical and sub-tropical regions, grows well in poor conditions and therefore doesn’t need to compete with food crops for good agricultural land, the companies said in statements on Friday.
The 50/50 jatropha joint venture will be called D1-BP Fuel Crops Ltd and aims to plant one million hectares of the plant over four years. The joint venture’s total funding requirement over five years is expected to be £80 million, the companies said.
D1 will contribute its existing jatropha planting business and its expertise to the joint venture, while BP will provide working capital of £31.75 million through equity in the operation, the companies said.
D1 Oils currently has 172,000 hectares of jatropha, or rights to that amount of plantings, in India, Southern Africa and Southeast Asia.
Based in Middlesbrough, D1 Oils first floated its shares in October 2004 for 160p each. Interviews with D1 Oils chief executive Elliott Mannis and BP head of biofuels Philip New can be seen at D1 Oils’s website,
The BP/D1 joint venture announcement comes three days after Associated British Foods announced that it was entering into a joint venture with BP and DuPont to build and operate a major biofuel plant at BP’s chemicals site at Saltend, Hull.
The deal will enable ABF to find a use for surplus low-quality grain its food and beverages operations. These include British Sugar, the sole processor of the UK’s sugar beet crop.
British Sugar is already developing a bioethanol plant at Wissington, Norfolk, which will use sugar beet as feedstock and is expected to begin production next month.
Also in the past week, another UK biofuels company, Teeside refinery owner Biofuels Corp, said it was hoping to prevent insolvency by adopting a restructuring plan that would involve handing over assets to its bank and de-listing its AIM-listed shares. The proposed restructuring must be approved by Biofuels’ shareholders.
The push for biofuels comes as fuel refiners face new UK regulations that will force them to blend 5% ethanol with their petrol, beginning in 2009.

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