Jatoil said the agreement of mutual cooperation is also expected to advance the development of a new and sustainable biodiesel industry based on jatropha feedstock.

The collaboration will involve strategically pooling knowledge and resources from two early entrants into the production of jatropha-based biofuel.

Jatoil operates in Indonesia and Vietnam while Perennial Bioenergy is operating in Ghana, West Africa, but the two companies have similar business strategies based on identifying and establishing jatropha oil-producing ventures that are further expanded by next-stage investors seeking a supply of plant oil and/or biodiesel.

Jatoil executive chairman Mike Taverner said the global collaboration would help reduce risks in a new industry.

The challenges faced by early-stage jatropha producers include the identification and production of high-yielding jatropha plants, the development of guidelines and standards for environmental sustainability, oil quality standards and shipping guidelines.

Perennial chairman John Peter Hernes said the collaboration would work toward fulfilling their ambition of being one of the world's leading sources of sustainable and low-cost biofuels.