SAO PAULO (Reuters) - BP Plc is still looking to close its deal with Bunge Ltd to merge sugar and ethanol assets in Brazil in 2019, so the companies can go on to plan their operations together for the new cane season that starts in early 2020.
BP’s chief executive for biofuels, Mario Lindenhayn, told reporters on the sidelines of Datagro’s sugar conference in Sao Paulo the oil major was just waiting for the green light of antitrust bodies in three countries, including China, to close the deal.
“We already had the approval from Brazil and the European Union, and we are expecting remaining approvals still this year, that is the objective,” Lindenhayn said.
BP and Bunge announced in July the deal to merge their Brazilian sugar and ethanol operations. BP agreed to transfer $700 million of Bunge’s debt to the new venture, and make an additional cash payment of $75 million to Bunge.
The resulting company will have 11 plants in Brazil and capacity to crush 32 million tonnes of cane per year.
Lindenhayn said BP sees an opportunity for continued growth in ethanol consumption in Brazil for years, despite changes in the global auto industry toward electrification.
He said he believed the current fuel infrastructure in Brazil, with ethanol pumps spread over all states, makes it likely that flex fuel cars and hybrid vehicles that will use ethanol will continue to dominate the market for years to come.
Lindenhayn also said he felt positive regarding the potential for increased ethanol blending in gasoline in large fuel-consuming countries such as India and China, which could help boost the global market for the biofuel.
Reporting by Marcelo Teixeira; Editing by Tom Brown