Feb. 2 (Bloomberg) -- Royal Dutch Shell Plc, the oil company that started an ethanol venture with Cosan SA Industria & Comercio in Brazil, is pushing biofuels as an alternative energy investment over wind and solar.
Shell will contribute assets including 2,740 service stations and as much as $1.93 billion to the 50-50 venture, the companies said yesterday. Cosan will provide $4.93 billion of assets, including plants able to crush 60 million tons of cane a year and control of an ethanol-trading unit.
Chief Executive Officer Peter Voser is placing a priority on biofuels to cut carbon emissions because they maintain supply of the liquid fuels that are the mainstay of Shell’s business as conventional oil deposits become harder and more expensive to find. The Cosan agreement may give Shell shared control of the world’s largest sugarcane produce.
“This is a deal that makes perfect sense as Shell no longer really has its focus on solar or wind energy,” Peter Heijen, an Amsterdam-based analyst at Theodoor Gilissen who rates Shell a buy, said in an interview. “Shell is betting on an expansion of ethanol in other markets while it also gets access to Brazil’s retail market.”
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