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NEW YORK ( TheStreet) -- BP(BP - Get Report) has taken further steps to expand its biofuels business by increasing its stake in several Brazilian biofuel companies.
BP said Wednesday that it has agreed to increase the company's share in Brazilian biofuel company Tropical BioEnergia to 100% by buying the remaining 50% of the company from joint venture partners for $71 million.
BP said it has plans to double the size of Tropical BioEnergia's operations to a capacity of five million tons of crushed cane, or 450 million liters of ethanol equivalent, a year.
This acquisition takes the number of ethanol producing mills in BP's Brazilian ethanol portfolio to three, all of which are located in the center-south states of Goiás and Minas Gerais.
BP's Biofuels vice president Philip New says "this is another significant milestone in BP's global biofuel strategy as we expand our operations base and demonstrate our genuine commitment to Brazil's ethanol industry, which can deliver sustainable and competitive biofuels into the global market."
BP also said on Wednesday that it has agreed to buy an additional 3% share of Brazilian sugar and ethanol producer Companhia Nacional de Açúcar e Álcool (CNAA) from LDC Bioenergia for about $25 million.
Along with BP's acquisition in April of 83% of CNAA's shares and a subsequent conversion of CNAA's long-term debt to equity, BP will now own a 99.97% stake in the company. The remaining shares are owned by minority private shareholders.
Shares of BP were spiking 3.7% to $37.78 Wednesday morning on news that a U.S. government report may find that BP should
not bear the sole responsibility behind the cause of the tragic Gulf of Mexico oil spill.
-- Written by Andrea Tse in New York.
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