Biofuel purchase

BP announced today that it intends to take a 50 per cent stake in Tropical BioEnergia, a joint venture established by Brazilian companies Santelisa Vale and Maeda Group.

Tropical BioEnergia is constructing a 435 million litre (115 million gallons) a year ethanol refinery in Edéia, Goias State, Brazil.

The joint venture, in which Santelisa Vale and Maeda Group would each hold 25 per cent, also intends to progress plans to build a second ethanol refinery, investing a total of approximately $1bn in the two refineries.

Assuming all the required approvals are received, BP will pay around $59.8m for the 50 per cent stake, subject to working capital adjustments, and provide funding for agreed future investment in line with its shareholding.

The parties said that they hoped to be able to complete the transaction before the end of June 2008.

The joint venture will focus on potential sugarcane production and the manufacturing and marketing of conventional ethanol, including the associated agricultural assets and cogeneration plants.