By Ian Walker

BP is taking full control of its Brazilian biofuels joint venture, BP Bunge Bioenergia, with the acquisition of its partner's 50% shareholding valued at $1.4 billion, as part of its plan to focus on new biofuels projects.

The oil major said Thursday that alongside the acquisition it is scaling back on the development of new biofuels projects and pausing planning for two potential ones. It is also looking to progress three other projects.

"Taken together, these changes can enable us to deliver the growth and returns we expect from biofuels, but in a simpler, more focused way," BP Executive Vice President, Customers and Products Emma Delaney said.

Upon completion of the acquisition BP will have 50,000 barrels a day of ethanol equivalent from sugarcane through BP Bunge Bioenergia's 11 agro-industrial units across five Brazilian states.

The joint venture has net debt of $500 million and lease obligations of $700 million.

BP said that acquisition and a focus on key biofuels production projects support the continuing growth of its strategic bioenergy business which includes both biofuels and biogas.

They are expected to deliver around $2 billion earnings before interest, taxes, depreciation and amortization from bioenergy by 2025 and $3 billion to $4 billion across all its transition growth engines.

Separately, U.S. grain trader and oilseed processor Bunge Global said that the joint venture has been operating well but isn't core to its long-term strategy.

The acquisition is expected to close by the end of this year, subject to regulatory approvals, BP said.

BP shares at 1223 GMT were up 0.65 pence, or 0.1%, at 467 pence. They are currently up 0.1% over the year to date.

Write to Ian Walker at

(END) Dow Jones Newswires

06-20-24 0852ET