bp has agreed to acquire Bunge’s 50% interest in their joint venture, bp Bunge Bioenergia S.A., a leading biofuels producer in Brazil.
With this acquisition, bp will become the sole owner of the sugarcane and ethanol business, enhancing value creation by integrating bp’s trading and technology capabilities. The stake’s enterprise value is approximately $1.4 billion, including net debt of $0.5 billion and lease obligations of $0.7 billion.
This acquisition meets bp’s bioenergy return threshold of over 15% and fits within bp’s financial framework, with capex targets of around $16 billion for 2024 and 2025. Post-acquisition, bp will have the capacity to produce around 50,000 barrels of ethanol equivalent daily from 11 agro-industrial units across five Brazilian states, covering the entire production chain to ethanol and sugar sales.
bp sees potential growth opportunities in the region, including next-generation ethanol, sustainable aviation fuel (SAF), and biogas.
Concurrently, bp is refocusing its biofuels development plans by scaling back on new SAF and renewable diesel projects at existing sites. While pausing planning for two projects, bp continues to assess three for progression. This move aligns with bp’s strategy to simplify its portfolio and focus on value and returns.
Emma Delaney, bp’s Executive Vice President of Customers and Products, stated, “bp Bunge Bioenergia is a leader in the industry. The acquisition allows bp to leverage our trading and technology capabilities further. Focusing on new biofuels projects driven by value aligns with bp’s priorities of simplifying business and increasing shareholder returns.”
This acquisition and the focus on key biofuels projects will support bp’s strategic bioenergy growth, aiming for $2 billion EBITDA from bioenergy and $3-4 billion from all transition growth engines by 2025.
