Zeons Corporation (ZEON)

[Pennimon]

ConocoPhillips and Archer Daniels to work on `biocrude'

BLOOMBERG AND AFP, WASHINGTON
Saturday, Sep 29, 2007, Page 10
"ConocoPhillips believes that the development of next-generation biofuels is a critical step in the diversification of our nation's energy sources."

Jim Mulva, chairman of ConocoPhillips

US oil giant ConocoPhillips and agribusiness leader Archer Daniels Midland Co announced on Thursday plans to collaborate on a new renewable "biocrude" fuel made from crops, wood and other sources.

"ConocoPhillips believes that the development of next-generation biofuels is a critical step in the diversification of our nation's energy sources," said Jim Mulva, chairman and chief executive officer at the Houston-based oil group.

"We are hopeful that this collaboration will provide innovative technology toward the large-scale production of biofuels that can be moved efficiently and affordably through existing infrastructure," he said.

The project will focus on the conversion of biomass from crops, wood or switchgrass into "biocrude," a non-petroleum substance that can be processed into fuel, as well as the refining of biocrude for transportation fuel.

Annual research investment will be at least US$5 million "for many years," said Lou Burke, manager of biofuels at ConocoPhillips.

Decatur, Illinois-based Archer Daniels will focus on making the biocrude, while ConocoPhillips will research ways to refine it, Burke said.

Archer Daniels is one of the world's largest processors of grains and a large producer of biodiesel and ethanol.

"Innovative collaboration like this will identify and bring to market feasible, economic and sustainable next-generation biofuels," Archer Daniels chairwoman and CEO Patricia Woertz said.

Biofuels, including ethanol made from corn starch and biodiesel made from soy beans, are drawing increased interest as energy sources after demand growth and concern over the adequacy of supplies pushed oil prices to record highs.

The news comes amid concerns that ethanol is diverting too much corn and other food crops into fuel.

Some have advocated the use of products such as switchgrass -- which grows wild on US prairies -- but commercial prospects for the alternative remain to be seen.

ConocoPhillips is the third-largest US oil company after Irving, Texas-based Exxon Mobil Corp, which is the largest, and Chevron Corp, based in San Ramon, California.
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- nice if these are our guys. From the sounds of it they are negotiating a deal. How does the timing of this announcement fit in. Gee Houston Texas...where the Natchez reactors are rumoured to be heading.