In the UK, NE Business is reporting that D1 Oils has commenced talks with BP aimed at swapping the oil giant’s stake in D1-BP Fuel Crops for a stake in D1 Oils.
The company said it has sufficient capital to fund operations through 2010. Aside from $11.6 million in its joint venture with BP, the company said it had $18.57 million in cash reserves in May.
D1 director of corporate communications Graham Prince was quoted as saying: “We are now concerned about raising resources and using the plantations to generate revenue for third parties. We have put in place a strategy which aims to generate revenue through animal feed products from the jatropha meal and production of oil. If we can put those measures in place, we will look more attractive to investors in due course.”
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Joelle Brink | Jun 25, 2009 | Reply
D1 started out growing Jatropha in India with a 50% stake from the Indian Government. They were agreed on sustainable farming practices, fair trade labor and small scale production serviced by D1’s innovative mobile refineries.
Then D1 got into financial trouble attempting to compete with bargain basement soy biodiesel from the US and sought a stake from BP. BP is one of the oil majors that Indira Gandhi kicked out of India in the 1970s for amassing huge land holdings and deriving much of their income from land rents that effectively reduced the local farmers to serfs.
Today foreign companies can no longer own land in India, but the government, which is still strongly influenced by the Gandhi family, was not pleased to see D1-BP leasing huge tea estates and brewery farms. According to some government insiders, this was one of the reasons for declaring the present moratorium on Jatropha plantation.
D1 has apparently also had difficulty educating BP about fuel farming and reasonable timelines for success. In the meantime, they want to bring to market Jatropha byproducts such as animal feeds and fertilizers that can keep the company profitable until the plants reach full productivity.
If D1 can shift BP’s stake from fuel farming to oil marketing, which it understands, everyone is likely to be happier, and India’s Jatropha plantation moratorium is likely to be shorter.