BP Enters Bioenergy Joint Venture With Bunge for $75 Million

By Oliver Griffin

BP PLC (BP.LN) said Monday that it has entered a joint venture with Bunge Ltd. (BG) to build a bioenergy company in Brazil, growing the U.K. oil company's biofuels business by more than 50%.

The integrated oil-and-gas company said it will pay $75 million to Bunge on the formation of the 50-50 joint venture, which will be known as BP Bunge Bioenergia.

BP said the joint venture will assume $700 million worth of nonrecourse debt associated with Bunge's assets. The deal is expected to close in the fourth quarter of the year, subject to regulatory approval.

The company will produce ethanol from sugarcane--around 70% of vehicles in Brazil can run on ethanol--and sugar. It will also be able to produce electricity from the waste biomass of the sugarcane.

BP Bunge Bioenergia is expected to be headquartered in Sao Paulo, Brazil. BP's Mario Lindenhayn and Marcus Schlosser will assume the roles of chairman and CFO, while Bunge's Geovane Consul will serve as CEO.

BP and Bunge will have equal representation on the board of directors, the company said.

Write to Oliver Griffin at [e-mail]; @OliGGriffin

(END) Dow Jones Newswires

July 22, 2019 07:13 ET (11:13 GMT)

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