bp acquires Bunge Bioenergia, boosts biofuels production in Brazil

bp has announced its acquisition of Bunge’s 50% stake in bp Bunge Bioenergia, securing full ownership of one of Brazil’s leading biofuels companies. This strategic move is set to enhance bp’s bioenergy portfolio and drive significant value creation through synergies with its existing trading and technology capabilities.

Key details of the acquisition

• Acquisition Value: The enterprise value of the stake to be acquired is approximately USD1.4 billion.
• Financial Impact: The acquisition will consolidate bp Bunge Bioenergia’s financial results, including USD0.5 billion in net debt and USD0.7 billion in lease obligations.
• Production Capacity: Post-acquisition, bp will have the capacity to produce around 50,000 barrels per day of ethanol equivalent from sugarcane across 11 agro-industrial units in five Brazilian states.

Strategic benefits

• Synergies: The integration of bp Bunge Bioenergia with bp’s trading and technology capabilities is expected to accelerate value creation and operational efficiencies.
• Growth Opportunities: Full ownership opens avenues for further growth in bioenergy, including next-generation ethanol, sustainable aviation fuel (SAF), and biogas.

 Biofuels development strategy

• Project Adjustments: bp is scaling back its plans for new biofuels projects at existing sites, pausing two potential projects while continuing to assess three others. This shift aligns with bp’s strategy to streamline its portfolio, focusing on high-value and high-return investments.
• Financial Targets: These adjustments are part of bp’s broader bioenergy strategy aimed at achieving approximately USD2 billion in EBITDA from bioenergy by 2025.

Emma Delaney, bp’s executive vice president for Customers and Products, highlighted the strategic importance of the acquisition: “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.”

The transaction, subject to regulatory approvals, is expected to close by the end of 2024. bp remains committed to expanding its bioenergy business, with targets to significantly increase biofuels production and biogas supply by 2030.