Martek Biosciences
The end goal of the agreement is to produce commercially scalable methods -- the most dire challenge facing the biofuel space today. With BP's weight behind the effort, this might just be realistic. The idea is that Martek will perform the research based on the initial phases it has already cultivated. Then BP will step in to automate and scale production.
Under the terms of the deal, both companies will retain rights to intellectual property held beforehand, but BP will hold the rights to any intellectual property produced during the course of the partnership. That being said, Martek will have an exclusive license to market the resulting technology in other sectors, including cosmetics, nutrition and pharmaceuticals.
Martek's research is somewhat different from the bulk of study being done in the area. Most startups are relying on algae that simply absorbs sunlight and carbon dioxide. Martek and a few others like Solazyme are working on fermentation methods in which algae convert sugar into biofuel. If this practice takes hold, it could be used to convert sugarcane and other cellulosic feedstocks into usable fuel in a more efficient way.
Whether of not Martek and BP will be successful hinges on the former's ability to find the right microbe to get the job done and engineer that strain to perform at top efficiency. The research that goes into this type of investigation is fairly expensive, so both companies are looking for a big payoff.
This is the latest in a series of deals between major oil companies and biofuel startups. Last month, Exxon Mobil signed a deal with Synthetic Genomics, ponying up $600 million for research into photosynthetic methods of biofuel production. Last year, Dow Chemical and Algenol Biofuels joined forces to study how algae can be used to turn carbon dioxide into ethanol.