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Big Oil and Emerging Biofuels Developers Forge Marriage of Convenience

June 14, 2011

SAN FRANCISCO, CA -- (June 14, 2011) -- Advancing next-generation biofuels technology from proof-of-concept to commercial reality will require major investment, a need that is being filled in part by oil giants and other industrial players. At the same time, these corporate powerhouses are staking their claims in this emerging area knowing that dwindling fossil fuel reserves will limit their existing businesses, according to Burrill & Company's annual report on the biotech industry.

"Big Oil is to biofuels companies what Big Pharma has been to biotech drugmakers," says G. Steven Burrill, CEO of the San Francisco-based merchant banking firm Burrill & Company. "It's a symbiotic relationship. Biofuels developers need Big Oil's deep pockets, global presence, and engineering expertise. At the same time, Big Oil needs a strategy beyond fossil fuels if they are to have long-term financial health."
Unlike the business of refining oil, Mr. Burrill notes, intellectual property will play a critical role in the emerging area of renewable technology, because companies could use it to block competitors from being cost-effective. Investments made today can shape the renewables landscape for years to come.

It's not just large oil companies, such as Royal Dutch Shell, Total, and BP that are making strategic investments in emerging biorenewables. Large chemical concerns such as DuPont and Dow Chemical are also positioning themselves to become major players in the field.

"Because of the cost and complexity of scaling biofuels to a point where they could compete with conventional fossil fuels, the early opportunities for these biofuel companies will be in the area of high-value specialty chemicals," Mr. Burrill says.

Renewable chemicals represent an enormous opportunity to companies that are challenged by the scale and cost of fuel production. Although most companies say their chemicals can compete with petrochemical-based molecules when oil is selling for $60 to $80 a barrel, with the exception of ethanol and handful of other alternatives, few renewables have reached commercial scale. As these companies ramp up operations, they are turning to renewable chemicals as a substitute for petroleum-derived chemicals for use in plastics, fibers, cosmetics, and as bulk and specialty chemicals.

These findings are contained within Biotech 2011-Life Sciences: Looking Back to See Ahead, Burrill & Company's 25th annual report on the biotech industry. The book is now available in print and electronic format at

This is one of the many issues explored in the book, which also examines healthcare reform, the advent of personalized medicine, regulation and policy reshaping the biotech industry, the changing financing environment, and the growing importance of emerging economies within the life sciences.

About Burrill & Company
Founded in 1994, Burrill & Company is a diversified global financial services firm focused on the life sciences industry. With more than $1 billion in assets under management, the firm's businesses include venture capital, private equity, merchant banking and media. By leveraging the scientific and business networks of its investment team, Burrill & Company has established unrivaled access and visibility in the life sciences industry. This unique combination of resources and capabilities enables the company to provide life sciences companies with capital, management expertise, insight, market intelligence, and analysis through its investments, conferences, and publications. Headquartered in San Francisco, the company oversees a global network of offices throughout the United States, Latin America, Europe, and Asia.

Upcoming Burrill & Company Events
The 2nd Annual Burrill Pan-Asia Life Sciences Meeting
June 26, 2011, The Grosvenor Auditorium, National Geographic Museum,
Washington D.C.

BIO International Convention
Super Session
Burrill State-of-the-Industry Report
Walter E. Washington Convention Center
Tuesday, June 28, 2011
2 p.m. to 3:30 p.m.
Visit Burrill & Company at Booth 3116

The Burrill Personalized Medicine Meeting
October 3-4, 2011. The San Francisco Airport Marriott, Burlingame, CA

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Peter Winter
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