D1 Oils, BP Form Joint Venture to Grow Jatropha for Biodiesel

D1 Oils plc, a UK-based producer of biodiesel, plans to establish a Joint Venture with BP to create a business in Jatropha curcas: D1-BP Fuel Crops Limited.

Jatropha is a drought resistant, inedible oilseed bearing tree which does not compete with food crops for good agricultural land or adversely impact the rainforest. It grows in tropical and sub-tropical regions and produces high yields of inedible vegetable oil that can be used to produce high-quality biodiesel. Jatropha can grow on a wide range of land types, including non-arable, marginal and waste land.

Under the terms of the agreement, BP and D1 Oils intend to invest around US$160 million (£80) million over the next five years. D1 Oils will contribute their 172,000 hectares of existing plantations in India, Southern Africa and South East Asia to the joint venture and the joint venture will have exclusive access to the elite jatropha seedlings produced through D1 Oils’ plant science program.

Highlights of the Agreement

Establishment of a 50:50 Joint Venture to undertake global planting of jatropha:

• Target to plant one million hectares over four years
• D1 contributes plantings to date and planting business
• BP contributes working capital of US$65 million (£32 million) through equity in the Joint Venture
• Total Joint Venture funding requirement of approximately US$160 million (£80 million) over five years
• Plant science remains 100% owned by D1
• D1 to grant BP an option to subscribe for new shares representing 16% of its enlarged share capital at an average price of 251 pence

Major global business to plant jatropha as sustainable biodiesel feedstock:

• Endorsement by BP of D1's sustainable feedstock strategy
• Potential to produce low-cost, volume supplies of inedible oil for biodiesel - Use of marginal and waste land and land unsuitable for arable crops
• No competition with high biodiversity value rainforest
• Significant job creation and value to local communities

Under the terms of the Joint Venture Agreement (subject to D1 shareholder approval), D1 and BP will work together exclusively on the development of jatropha as a sustainable energy crop, including the planting of trees, harvesting jatropha grain, oil extraction and transport and logistics. Production of jatropha oil for refining into biodiesel is expected to begin in 2008.

D1 Oils Plant Science Limited, D1's plant science business, will act as the exclusive supplier of selected, high yielding jatropha seeds and seedlings to the Joint Venture. The strategy for the Joint Venture sees it planting Elite seed in greater quantities than D1's stand alone plan.

With the conclusion of this transaction D1 will comprise, in its upstream business, its wholly owned plant science operations together with the IP in plant science, in addition to 50 per cent. of a global planting joint venture with BP. In its downstream operations, the business will include, as it does now, its wholly owned interests in refining and trading.

Commenting on the announcement, Lord Oxburgh of Liverpool, Chairman of D1 Oils plc said:

"Biodiesel is a young industry, but is rapidly becoming an established part of the global renewable energy landscape. It is crucial that we develop supplies of alternative, inedible vegetable oils like jatropha that are not subject to the same demand pressures as food oils and that are grown on non-essential land. This partnership with BP strengthens D1's strategy of delivering commercial volumes of jatropha oil at competitive prices, whilst truly supporting the communities in which we operate."

Elliott Mannis, Chief Executive Officer of D1 Oils plc, said:

"This is a transforming event for D1. BP's decision to join us in this new venture is a significant endorsement of our strategy to develop jatropha for the production of sustainable biodiesel. It shows we have come a long way. BP's proven logistical, managerial and financial support will enable a significant enhancement and acceleration of the scope and pace of jatropha planting."

Philip New, Head of BP Biofuels, said :

"As jatropha can be grown on land of lesser agricultural value with lower irrigation requirements than many plants, it is an excellent biodiesel feedstock. D1 Oils' progress in identifying the most productive varieties of jatropha means that the joint venture will have access to seeds which can substantially increase jatropha oil production per hectare."

D1 Oils plc is a UK-based global producer of biodiesel whose vision is to be the world’s leading biodiesel business. Their operations cover agronomy, refining and trading. They are pioneering the science, planting and production of inedible vegetable oils; they design, build, own, operate and market biodiesel refineries; and they source, transport and trade seeds and seedlings, seedcake, crude vegetable oils and biodiesel.

Although not suitable for temperate climates, jatropha promises to be less expensive and less competitive for land than food based oil seeds that are used as feedstock for biodiesel. Although more land intensive than algae, It requires no development and D1-BP should have no trouble meeting their goals.  The development of industry, in non petroleum producing tropical and subtropical climates, is a real plus. Jatropha being able to be grown on non-arable, marginal and waste land are similar conditions claimed for switchgrass, but it can produce biofuel now with well known technology, that can be easily integrated into our fuel infrastructure. Algae plus jatropha rather than grain oil seeds may be the answer to large scale production of biodiesel.

Comments

[JohnBo]

This is a very positive move by BP and illustrates what the market place can achieve if not hampered by over regulation or government corruption. What I like about this project is that people living in harsh regions of the world can have the opportunity for success. Companies of decent people like BP are to be praised.

[Doug]

What incentives are there for farmers to plant this crop in the U.S. versus any other potential crop? If we look at the U.S. as a fixed agricultural pie (which it is in some respect) then what economic value could this crop provide to farmers that, say, soy beans wouldn't?

[JohnBo]

Hi Doug, I don’t believe they are considering the US. There are probably few if any locations here that jatropha can be grown since it requires a tropical climate. One should grow whatever produces the most profit per acre so I assume economics will rule. But it might be a boom for others.

[wgm]

The Science OR Discovery Channel had a segment on Jatropha nuts. They're actually planning a 600 acre grove somewhere in Central California as the Jatropha nut can adapt to various climates as the segment presented it.The nut is native to India but it has been demonstrated that it can be grown in places like the Sonora Desert or elsewhere.

[Florentino A. Caja]

jatropha for diodiesel is sunshine industry. We have 1,000 hectares land in Subic Bay area, Zambales, Philippines accessible to Subic Bay Freeport. Planted 2 hectares to jatropha. We are open to joint venture. If interested what is your terms?

[Florentino A. Caja]

jatropha plants for biodiesel is sunshine industry. We have available 1,000 hectares land in Subic Bay area, Zambales, Luzon, Philippines. Near to Subic Bay Freeport. We are open for joint venture arrangement. If interested what are the terms?

[jatrophashop]

Jatrophashop.com is the first website where you can find a wide selection of Jatropha seeds from all over the world.

Seeds are selected and tested in pilot plantations and are sold opportunely treated: coated, incrusted and pelletted. These processes improve seeds conservation (up to two years) and the absorption of water and nutrition in the first phases of growing.

Try our seeds and tomorrow you could become a biofuels producer too.

[jatrophashop]

Jatrophashop.com is the first website where you can find a wide selection of Jatropha seeds from all over the world.

Seeds are selected and tested in pilot plantations and are sold opportunely treated: coated, incrusted and pelletted. These processes improve seeds conservation (up to two years) and the absorption of water and nutrition in the first phases of growing.

Try our seeds and tomorrow you could become a biofuels producer too.

[Miguel Berumen]

Darins Naturals along with Nextrade Peru, have come in to a verbal agreement with Indigenous tribes in the Peruvian amazon region over 160 communities to begin. With the intend to grow a total of 200,000HA, full entitled ownership of the land by these tribes along with willingness to kick petrol companies whom are intending in coming in giving them a un-fair percentage to deforest and drill for oil. The intention is to grow Caoba, Jatropha, Sacha Inchi, Jungle Peanuts, Cacao, and Capuazu to generate a profitable Eco-business for us all. Giving the tribes their economical independence, business around the world cost effective biofuel feed stock, and organic foods for the world, not to mention re forest amazonian jungles (the lungs of the world)what we need is investors, we are working with worldsnest to acomplish a eco-friendly infrastructure with buildings would be erected to store, dry, process these product all in accordance and blending with the jungle atmosphere. Great possibility has the 200,000HA is just a part of how much land is really available well over 1million HA, if you take in to account we deal with the president of the Amazonian tribes council whom has great summoning power with other tribes around the amazon.

more information please contact Miguel Berumen
aluxbalum@hotmail.com 310 594 3198
only serious inquiries please thank you

[MOHAMED MONCEF YOUSSEF]

WE ARE EUROMEDA-A BIODIESEL BOARD (EUROMED AFRO-ARABE BIODIESEL BOARD) EGYPT
WE HAVE A PROTOCOLE TO CULTIVATE JETROPHA IN 50.000 HA FOR THE BENEFIT OF EGYPTIENS FARMERS.
WE ASK YOU TO BE OUR PRINCIPAL PARTNER FROM SOIL TO OIL (ADVISOR, TRAINING OF FARMERS, FINANCE, SUPPLIES, AND EXPORT OF BIODIESEL)
PLEASE CONFIRM VERY SOON.
MOHAMED MONCEF YOUSSEF
PRESIDENT DE EUROMEDA-A B.B./EGYPT