BP venture eyes investment to make green jet fuel in Argentina

The Pan American Energy Group, half-owned by British oil major BP Plc, is mulling an investment to make clean jet fuel at its refinery outside Buenos Aires, according to people familiar with the matter.

The company is weighing a significant upgrade to its Campana oil refinery so that it can produce sustainable aviation fuel, or SAF, said the people, who spoke on condition of anonymity because they weren’t authorized to speak publicly about private deliberations. A final decision hasn’t been made and BP may still choose not to proceed with the project.

A spokesperson for closely-held Pan American, Argentina’s second largest oil and gas producer, declined to comment. The company is also a major crude refiner and fuel retailer via its Axion brand.

SAF is emerging as a key tool for global aviation to curb its carbon footprint. Investors are circling the burgeoning industry as support from policymakers picks up from Europe to the US. But with airlines procuring larger amounts of the clean fuel, demand is predicted to keep outstripping supply.

While in Latin America Brazil is drawing much of the attention of SAF investors, in neighbouring Argentina President Javier Milei is embarking on a crusade to deregulate the country’s economy and improve the business climate. In his first year in office, Milei has been freeing up oil and crop markets from government intervention. He has also drawn up a sweeping package of tax, currency and customs incentives for energy projects, including for refining investments of at least US$200 million.