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BP buys out Verenium

Oilfield Technology,

BP and Verenium Corporation today announced an agreement for BP Biofuels North America to acquire Verenium's cellulosic biofuels business, including the company's facilities in Jennings, LA and San Diego, CA for US$ 98.3 million. Verenium will retain its commercial enzyme business, including its biofuels enzymes products and have the right to develop its own lignocellulosic enzyme programme.

"This acquisition demonstrates BP's intent to be a leader in the cellulosic biofuels industry in the US and positions us as one of the few global companies with an integrated end-to-end capability, from R&D through commercialisation to distribution and blending," said Philip New, CEO of BP Biofuels. "Our partnership with Verenium has been very fruitful, enabling the companies to develop a leading cellulosic ethanol technology package, driven forward by the skills and expertise of people from both companies."

The major terms of this agreement include:

BP will acquire the Jennings, LA facilities, including the pilot plant and the demonstration-scale facility as well as the San Diego, California R&D facilities, Cellulosic biofuels technology and related IP, and Cellulosic enzyme technology and related IP.

Verenium will retain its core commercial enzyme business, including the personnel and supporting technology required to develop the business, including for applications in the biofuels segment.

It will also receive a US$ 98.3 million payment from BP, US$ 10.8 million in cash to be released upon assignment of its lease for the San Diego facility to BP, the ability to access select biofuels products developed by BP (using the technology it is acquiring from Verenium).

BP will also become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and will independently manage all of Vercipia's activities going forward. Similarly, Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium, will be owned 100% by BP.

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