BRAZIL— British oil major BP and U.S. Agribusiness giant, Bunge Limited have put their Brazilian sugar and ethanol joint venture BP Bunge Bioenergia up for sale, newspaper Valor Economico reported.

Bunge has been trying to divest from its ethanol plants in Brazil for a while, having considered an initial public offering in 2018, before entering the joint venture with BP.

The deal gave BP a role in Brazil’s ethanol market and already had clauses on exit rights after 18 months.

In a statement sent to Reuters, Bunge reiterated it was assessing options to exit its participation in the sugar and bioenergy joint venture, but did not provide details on how that could happen.

“While we are pleased with how the business is performing, it is not core to our overall business strategy,” Bunge said.

Abu Dhabi’s Mubadala and Brazilian energy company Raizen SA- a joint venture of Shell and Cosan SA- were among those interested to buy the company, said the report, citing sources familiar with the matter.

The company’s assets were valued at between 9 billion and 10 billion reais (US$1.96 billion)

This would be Mubadala´s first investment in ethanol in Brazil. The fund owns in the United States Enviva Partners, which produces wood pellets used for power generation. Raizen, already the largest ethanol producer in the country, would consolidate its leadership.

The company’s assets were valued at between 9 billion and 10 billion reais (US$1.96 billion). BP and Bunge’s deal to create the 50-50 joint venture, managing 11 plants with a total capacity to crush 32 million tonnes of sugarcane per year, was first announced in 2019.

By its effective crushing capacity, the company is ranked the world’s third-largest sugarcane processor and the second largest player in the industry in Brazil.

Sugarcane has been the primary feedstock of Brazilian ethanol for over 35 years. Most of the biofuel in Brazil is then blended into gasoline, a dominant energy source for transportation, and the process eventually reduces the rate of petroleum consumption.

As the production and combustion of ethanol reduce GHG emissions by 12% compared to fossil fuels, the Brazilian utilisation of the biofuel has become a noteworthy topic for the discussion on conservation and climate change.

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