Shell, Cosan To Form $12bn JV In Brazil

Published: 01-Feb-2010

Shell International Petroleum (Shell) and Cosan have signed a non-binding memorandum of understanding (MoU) to form an approximately $12bn joint venture (JV) in Brazil for production of ethanol, sugar and power, and the supply, distribution and retail of transportation fuels.

Under the terms of the MoU, both companies would contribute certain existing Brazilian assets to the JV. In addition, Shell would contribute a total of $1.62bn in cash, payable over two years.

Mark Williams, downstream director of Royal Dutch Shell, said: “We're looking forward to joining with a leading company in Brazil to meet the needs of retail and commercial fuels customers in that growing market.

“We see joining with Cosan as a way to grow the role of low-carbon, sustainable biofuels in the global transportation fuel mix. The joint venture would also enable Shell to set up a material and profitable bio-fuels business, with the potential to deploy next generation technologies.”

The two parties will maintain negotiations towards a binding JV agreement, which shall be subject to final transactional documentation, due diligence, agreement between the two parties on important sustainability issues, regulatory approvals and respective corporate approvals.

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