BP Pays $98 Million For Verenium Biofuels Activities

Oil major BP beefed up its biofuels business on Thursday by paying $98 million for technology and facilities developed by U.S. partner Verenium.

The British energy giant said the acquisition will allow it to develop a comprehensive package for the sector.

"This acquisition demonstrates BP's intent to be a leader in the cellulosic biofuels industry in the U.S. and positions us as one of the few global companies with an integrated end-to-end capability," said Philip New, chief executive of BP Biofuels.

"BP Biofuels should be well placed to accelerate the delivery of low cost, low carbon, sustainable biofuels, at scale," New said.

The purchase comes as BP is in the midst of a plan to make $10 billion of divestments of non-core, upstream assets to help pay for clean-up costs for the worst offshore oil spill in U.S. history in the Gulf of Mexico.

The transaction was announced one day after rival Exxon Mobil Corp opened a greenhouse facility for its $600 million program to develop biofuel from algae.

Under BP's deal with Verenium, it will take ownership of Verenium's cellulosic biofuels technology, two joint ventures and facilities in Jennings, La., and San Diego, Calif.

BP said it had announced investments of more than $1.5 billion since 2006 in biofuels research, development and operations.

Verenium - which specializes in high-performance enzymes for use in industrial processes -- will retain its commercial enzyme business, including its biofuels enzymes products.

"As a result of this transaction, Verenium will have the resources to grow our commercial enzyme business while maintaining strategic access to the emerging cellulosic ethanol market," said Carlos Riva, president and chief executive of Verenium.