BP to Secure Complete Control of BP Bunge Bioenergia

bp has reached an agreement to purchase Bunge’s 50% stake in bp Bunge Bioenergia S.A., a prominent biofuels producer in Brazil.

Upon finalization, bp will assume full ownership of the large-scale sugarcane and ethanol enterprise, facilitating accelerated value generation by leveraging bp’s trading and technology expertise.

The stake's enterprise value is approximately $1.4 billion. This acquisition will consolidate 100% of the venture’s financial outcomes, encompassing net debt of around $0.5 billion and lease obligations totaling about $0.7 billion.

The acquisition meets bp’s target for bioenergy returns of over 15% and aligns with bp’s rigorous financial guidelines, which include annual capital expenditure targets of approximately $16 billion for both 2024 and 2025.

After the acquisition, bp will have the capability to produce approximately 50,000 barrels per day of ethanol equivalent from sugarcane across 11 agro-industrial units in five Brazilian states through bp Bunge Bioenergia. The company operates with an integrated model that spans the entire production chain from cultivation to the sale of ethanol and sugar.

bp anticipates that full ownership will also enable the exploration of additional growth prospects in the region and the advancement of new bioenergy platforms, including next-generation ethanol, sustainable aviation fuel (SAF), and biogas.

In conjunction with this acquisition, bp is scaling down its plans to develop new sustainable aviation fuel (SAF) and renewable diesel biofuels projects at its existing sites. It is pausing the planning phase for two potential projects while continuing to evaluate the progress of three others. This strategic move aligns with bp’s focus on streamlining its portfolio to prioritize value and returns.

Emma Delaney, bp’s Executive Vice President of Customers and Products, commented, "bp Bunge Bioenergia is widely acknowledged as an industry leader. I am enthusiastic about the opportunity for bp to enhance value through our trading and technology capabilities. bp has been an early participant in Brazil's bioenergy sector, and we are eager to continue growing and evolving in this market."

"Aligning our strategy to concentrate on new biofuels projects is also motivated by value. Collectively, these adjustments position us to achieve the growth and returns we anticipate from biofuels, while adopting a streamlined and focused approach. This approach is entirely consistent with bp's objectives of sharpening business focus and enhancing shareholder returns."

This acquisition and the concentration on critical biofuels production projects are anticipated to bolster the ongoing expansion of bp's strategic bioenergy sector encompassing biofuels and biogas. These efforts align with bp's unchanged 2025 targets to achieve approximately $2 billion in EBITDA from bioenergy and $3-4 billion across all its transition growth platforms.