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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (34881)	5/22/2008 4:43:37 AM
From: elmatador	Respond to of 217753

Gain at the Pump: Who’s Helping Cosan Buy Gas Stations? Posted by Keith Johnson Antonio Regalado reports: Brazil’s largest ethanol maker Cosan Ltd. said today it’s going to spend $826 million to acquire ExxonMobil’s gas stations in the country. (WSJ article here.) It makes sense. Unlike in the U.S., where E10 pumps are tough to find, Brazilian drivers now use more ethanol than gasoline. Why not have an ethanol company own the gas stations? But one mystery is where Cosan is coming up with the money for the deal. Paulo Diniz, Cosan’s chief financial officer, promised in conference calls yesterday that the company wouldn’t spend the money it raised in its recent IPO on the NYSE. Investors are already concerned about dilution—and that money is earmarked for boosting its production of ethanol, which in Brazil is made from sugarcane. Instead, Mr. Diniz said Cosan might be looking for a strategic investor. Who is it? One market source said yesterday that the likely partner is BP PLC, in recent years one of the greenest of the big oil companies. (Tar sands revival notwithstanding.) Cosan couldn’t comment, a spokesman said, because some of its key exectutives are in London. Our source said Cosan boss Rubens Ometto is there talking to BP, and a deal could be wrapped up in a couple of days. A BP spokesman said he didn’t know about any deal. It’s not clear if ExxonMobil does either. A spokesman there had no comment. Time will tell, but the move would be a natural for BP. Thursday, the British oil company said it was forming a joint venture in Brazil with local producers to invest $1 billion building a new ethanol refinery and improving another. Phil New, head of BP Biofuels, touted the investment as “the largest made by an international oil company in the Brazilian ethanol industry” and–in a nod to growing concern over biofuels and food prices–he said it “represents a significant step in delivering BP’s strategy for biofuels which centres around sustainable feedstocks that do not impact on food supplies.”