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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: tom pope who wrote (99758)	4/24/2008 2:02:14 PM
From: elmatador	Respond to of 206121

Cosan to Buy Exxon Distribution Assets in Brazil Cosan SA Industria e Comercio, the world's biggest sugar-cane processor, agreed to buy more than 1,500 Brazilian service stations and other assets from Exxon Mobil Corp. for $826 million as demand for ethanol rises. The acquisition of Esso Brasileira de Petroleo Ltda. will make Cosan the fifth-largest fuels distributor in Brazil, with 7.2 percent market share, Piracicaba, Brazil-based Cosan said today in a statement. Esso Brasileira also offers aviation-fuel services and owns a lubricant plant in Rio de Janeiro and distribution terminals. Cosan is seeking to sell ethanol directly to consumers as Brazil's service-station operators consolidate and more drivers buy so-called flex-fuel cars. Rising demand for the cars, which run on any mixture of gasoline or ethanol, helped propel ethanol sales volumes in Brazil past gasoline in February, Cosan said, citing the National Petroleum Agency. The transaction ``guarantees bargaining power when dealing with Petrobras,'' the biggest refiner and distributor of gasoline in Brazil, said Ricardo Vieira, an analyst at Quest Investimentos in Sao Paulo. ``It's complicated when you're negotiating with such a big buyer, and now they will go directly to the consumer.'' Cosan Shares Cosan shares fell 95 centavos, or 3.5 percent, to 26.05 reais at 2:02 p.m. in Sao Paulo trading, after earlier falling as much as 9.1 percent. Shares of parent company Cosan Ltd. fell 52 cents, or 4 percent, to $12.59 percent in New York. ``Cosan's comparative advantage was that it had a vast area of productive land and could produce ethanol much cheaper than the U.S. and Europe,'' Vieira said in a phone interview. ``Now it's entering a segment that has very low margins.'' By law, Brazilian service stations must offer ethanol at their pumps and distributors are required to mix ethanol into gasoline. Flex-fuel cars made up 85 percent of all light-vehicle sales in Brazil in the past year, Cosan said. Brazil is the world's biggest producer of ethanol from sugar cane. Petroleo Brasileiro SA, the state-owned oil company known as Petrobras, also bid for the Exxon assets, Paulo Roberto Costa, head of Petrobras's refining division, said March 31. Cosan said it plans to use $310 million raised in a stock sale to pay for the acquisition and may finance the rest. Exxon Mobil, the world's largest oil company, agreed to sell the assets so the Irving, Texas-based company can focus on more promising growth areas, spokeswoman Prem Nair said today in a telephone interview. Exxon Mobil has been in Brazil since 1912, according to the company's Web site. ``Exxon Mobil's decision is the result of a careful assessment of the company's global portfolio and of its opportunities for growth,'' Nair said. ``The transition to the new owner may take a number of months.'' Exxon Mobil's exploration and chemical assets in Brazil are not for sale, Nair said. The company is one of 11 international energy producers exploring an offshore region where Petrobras has discovered what may be two of the world's three biggest finds in the past 30 years. Exxon shares fell $1.08, or $1.2 percent, to $93.14 in New York Stock Exchange composite trading. A close at that price would be the biggest drop since March 19.