D1 Oils in deal with Saudis over biodiesel

D1 Oils plc ('D1 Oils'), a low cost producer of biodiesel, is creating D1 Oils Arabia Limited with Jazeera For Modern Technology. D1 Oils Arabia will be a 50/50 joint venture and will manage the plantation of jatropha trees which D1 Oils uses as feedstock to produce renewable biodiesel. D1 Oils Arabia will also install refineries in Saudi Arabia and expand the D1 Oils brand throughout Saudi Arabia and into other Gulf area countries.

Main components to the joint venture establishing D1 Oils Arabia include:


• Jatropha will be grown on former desert land therefore converting the desert into usable agricultural land in the long term reversing desertification.


• Plantations of jatropha for biodiesel in Saudi Arabia will use waste water (ie: treated sewerage water) exclusively.


• Jazeera will contribute 5000 hectares of land to be owned by the joint venture for a pilot plantation, with access to an additional 100,000 hectares on successful completion.


• D1 Oils will provide the technical knowledge for the establishment and ongoing maintenance of the jatropha plantations and the D120 biodiesel refineries.


• Jazeera will provide working capital and access to non-recourse credit facilities, up to an agreed amount for the purchase of required equipment and other operational needs.


• D1 Oils Arabia will be the exclusive representative in the Kingdom of Saudi Arabia for the products and services offered by D1 Oils.

The formation of D1 Oils Arabia is expected not only to provide Saudi based customers with innovative alternative renewable fuel solutions, but also help stem desertification and reclaim land by the planting of jatropha on marginalized land. As jatropha is a non-edible crop, D1 Oils is able to irrigate the plantations with waste water that otherwise would have been difficult to dispose of.

D1 Oils Arabia combines D1 Oils' know how and technology in the growing of jatropha and the development of its biodiesel refineries, with Jazeera's expertise in developing and marketing new technologies and its ability to ensure supply chain efficiency.

The commissioning of the first D1 20 refinery in Saudi Arabia is expected as soon as the plantations come on stream, which is projected to be in the second half of 2006. More refineries will be necessary as the jatropha production increases.

Sheikh Soued Al Blaihed, Chairman of Jazeera For Modern Technology, said:
'Jazeera is excited to be partnering with D1 Oils, who we see as the global leader in the development of alternative fuels and biodiesel production today, and we look forward to working with them to establish new renewable fuel solutions and helping reduce carbon emissions. This venture will develop new industries in Saudi Arabia which will in turn provide sources of new jobs and environmentally directed applications.'

Karl Watkin, Chairman of D1 Oils, stated:
'We are pleased to announce the establishment of D1 Oils Arabia on the day the Kyoto agreement comes into effect. This venture creates a great step change in the recognition of the D1 brand on the global stage. Helping to deliver a renewable energy solution to the world's most recognised petroleum based economy is a huge achievement for our business.'

Philip Wood, Chief Executive Officer of D1 Oils, commented:
'This joint venture with a well experienced partner in Saudi Arabia represents a strong endorsement of our technology and of jatropha as our feedstock of choice. It is a perfect example of the marketing strategies we have begun to implement during the past year. The structure significantly reduces our capital requirement for entering this market and enables us to accelerate our plan to make D1 the solid and trusted brand for biodiesel.'