BP Buys out Balance of Shares in Tropical Bioenergia to Expand in Brazil

BP declared that it has consented to augment its share to 100% in Tropical BioEnergia, a Brazilian biofuel company, by buying the balance of 50% shares from its venture partners LDC-SEV Bioenergia and Maeda S.A. Agroindustrial each with 25% share for a total cash value of around US$71 million. In addition to the payment, BP will also finance for the current debts of Tropical.

The completion of the deal, which is subject to regulatory endorsement and settled closing conditions, will enable BP to own 100% stakes in Tropical BioEnergia and operate its mill located in Edéia, Goiás state producing ethanol. BP is planning to double its operations at Tropical BioEnergia to 5 Mt of crushed cane which is equivalent to 450 Ml of ethanol every year and also has plans to further develop its operations in the region. The mill will also have the capability to supply around 250 GWh of electricity to the grid.

The present acquisition will add to its ethanol production in Minas Gerais and Goiás states located in center-south of Brazil thus making its ethanol portfolio in the country to three. The mill supplies the produced ethanol for use in Brazil as well as to international markets. The agricultural land owned by BP and utilized for sugarcane cultivation in Brazil falls within the permitted area limits suggested by the country’s Agro-Ecological Zoning of Sugarcane.