Cosan, Brazil’s biggest sugar and ethanol producer, has agreed to buy the Esso chain of filling stations in Brazil from ExxonMobil for $826m plus $198m in debt.

The deal represents the first big investment by a sugar and ethanol producer in retail fuel distribution and was announced on the same day that BP of the UK said it would join a R$1.66bn joint venture to produce fuel ethanol in Brazil – the first big investment by a major oil company in ethanol production.