D1 Oils to buy BP's stake in jatropha JV

Reuters - D1 Oils Plc, a British biofuels technology company, said on Friday it conditionally agreed to acquire BP Plc's stake in the D1-BP Fuel Crops joint venture for 0.5 million pounds ($818,900) in cash.

The company said it planned to take back the full ownership of the global planting assets and interests of the joint venture -- to develop a non-edible crop, jatropha, as a biofuels feedstock.

D1 shares, which rose as much as 39 percent, pared early gains and were up 17 percent at 6.75 pence at 0850 GMT on the London Stock Exchange. They touched a market high of 8 pence earlier in the session.

The company said it would also pay BP, by way of deferred amount, 30 pounds for every tonne of the first 20,000 tonnes of crude jatropha oil (CJO), up to a maximum of 600,000 pounds, produced by D1 and sold to third parties.

D1, which expected to remain cash positive till the end of 2010, said the joint venture had net assets worth 7.6 million pounds as of end-June.

As of May 31, D1-BP Fuel Crops had interests in about 220,000 hectares of Jatropha in Africa, India and South East Asia, which currently represent about 25 percent of the estimated total global planting of jatropha.

On June 23, the company had said it was in talks with BP to dissolve the D1-BP Fuel Crops joint venture and bring planting and plant science operations together under full D1 Oils control.

In February, the partners had agreed to market a substantial share in the joint venture, which was announced in June 2007, to third parties to help fund further growth and development of the business.

"This agreement enables us to bring all existing jatropha planting assets and interests back under full D1 control while retaining an alignment of interest on Jatropha with BP... achieved in exchange for a low cash outlay," Chief Executive Ben Good said in a statement.

Separately, the company said it agreed with Bedford Biofuels, a privately held Canadian company with commercial jatropha plantations in Kenya and Zambia, to provide plant science and planting technology over five years.