The partners have agreed to remove the mutual time-bound buyout options included in the original joint venture agreement, signed in June 2011, and in doing so have transformed Raizen from a temporary to a permanent joint venture.

“Low-carbon, sustainable biofuels play an important role today and will be required long term for heavy duty and long distance transport,” John Abbott, Shell’s Downstream Director, said. “We are pleased with Raizen’s strong
performance. This commitment reaffirms the stability of Shell and Cosan’s partnership, and our shared view of the long term objectives and value of the business.”

Cosan CEO Marcos Lutz said, “Transforming Raizen into a permanent joint venture strengthens the partnership we built with Shell over the last five years, while paving the way to continue our successful journey in Brazil. Our partnership with Shell is instrumental to being recognized for excellence in the development, production and marketing of sustainable energy.”

Raizen is the world’s largest individual producer of sugarcane, producing more than 4 million tons of sugar, more than 2 billion liters of ethanol and 2.2 gigawatt hours of cogenerated energy in 2015. It also operates a network of more than 5,800 Shell-branded service stations in Brazil.

Raizen is a 50-50 joint venture (JV) between Shell and Cosan.

The changes to the JV agreement remove the time-bound options for Shell and Cosan to buy out each other’s shares in the JV from 2021 and replace them with event-triggered options, which Shell describes as “a common feature in JV agreements … designed to address specific risks that may arise during the life of the JV.”

“They have been added to provide each party with the comfort that Raizen will continue its strong performance to date and that the two shareholders are aligned in their long term objectives with respect to the JV,” Shell said.