BP Eyes Biofuel Dominance In Brazil With Expansion Plans: Report

BP p.l.c. BP reportedly plans to assess expanding and diversifying its biofuel operations in Brazil, exploring new products like second-generation ethanol and sustainable aviation fuel following its acquisition of a stake in BP Bunge Bioenergia.

Last week, the British oil major bought Bunge Global SA‘s BG 50% stake in their joint venture, BP Bunge Bioenergia S.A., for an enterprise value of about $1.4 billion.

The acquisition will consolidate 100% of the venture's financial results, including net debt of about $0.5 billion and lease obligations of around $0.7 billion.

In written comments, the company expressed its plans to utilize the expansive biofuel infrastructure of the venture in Brazil, including an industrial complex comprising 11 plants located across five states that specialize in processing sugarcane, reported Reuters.

BP said in the comment, “We will seek to explore new growth opportunities in the region and develop new bioenergy platforms, such as next-generation ethanol, SAF, e-fuels and biogas,” per the report.

Biofuels expert Soren Jansen, a former executive at Brazil’s Copersucar, stated, “The whole alcohol-to-jetfuel supply chain is very expensive to build up, and the deep pockets from the oil companies is accelerating the process with an initial geographic spread over Brazil, the U.S., Europe and Japan.”

As per the report, the approach of BP mirrors that of Shell plc SHEL, which previously teamed up with Brazilian sugar and ethanol major Cosan S.A. CSAN to form Raizen SA, which is pioneering the world’s largest cellulosic ethanol program, focusing on second-generation ethanol.

Notably, Raizen launched its second 2G ethanol plant in May, producing fuel from biomass residues of processed sugarcane with 80% less carbon than gasoline.

Investors can gain exposure to the stock via Direxion Hydrogen ETF (ARCA: HJEN) and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ARCA: EIPX).

Price Action: BP shares are up 0.76% at $35.78 premarket at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.