Anglo-Dutch oil and gas major Royal Dutch Shell Plc (AMS:RDSA) and Brazil's Cosan SA Industria e Comercio (BVMF:CSAN3) are reinforcing their 50/50 Brazilian sugar and ethanol joint venture Raizen by making it a permanent one.
The companies on Wednesday said they have agreed to revise their joint venture agreement, struck in 2011, removing the time-bound options to buy out each other's shares in the business from 2021. Raizen is in this way transformed from a temporary to a permanent joint venture, they added.
Raizen is the world's biggest individual producer of sugarcane. Last year, it produced more than 4 million tons of sugar, more than 2 billion litres (528 million gallons) of ethanol and 2.2 GWh of cogenerated energy. It also operates more than 5,800 Shell-branded service stations in Brazil.
"Low-carbon, sustainable biofuels play an important role today and will be required long term for heavy duty and long distance transport," said John Abbott, Shell's downstream director, as he expressed satisfaction with Raizen's strong performance.
Shell, Cosan make Raizen JV permanent