bp to acquire Brazilian firm Bunge Bioenergia

bp announced that it has agreed to acquire Bunge’s 50% holding interest in their bp Bunge Bioenergia S.A. joint venture, a leading biofuels producer in Brazil to develop new opportunities for next-generation ethanol, sustainable aviation fuel and biogas.

“bp Bunge Bioenergia is widely recognised as a leader in the industry. I am excited by the opportunity for bp to now add further value from our trading and technology capabilities. bp was an early entrant into the bioenergy business in Brazil and we look forward to continuing to grow and develop here,” said Emma Delaney, executive vice president, bp.

“Focusing our plans to develop new biofuels projects is also driven by value. Taken together, these changes can enable us to deliver the growth and returns we expect from biofuels, but in a simpler, more focused way.”

The acquisition is valued at approximately $1.4bn and will result in bp consolidating 100% of the venture’s financial results, including net debt of $0.5bn and lease obligations of $0.7bn.

This move aligns with bp’s bioenergy return target of over 15% and adheres to their financial framework, including capital expenditure targets of $16bn for both 2024 and 2025.

Following the acquisition, bp will have the capacity to produce around 50,000 barrels of ethanol equivalent per day from sugarcane through bp Bunge Bioenergia’s 11 operational units across five Brazilian states.

The company operates an integrated business model encompassing the entire production chain, from sugarcane to ethanol and sugar sales.

bp anticipates this acquisition to unlock further growth opportunities in the region within the biofuel space.