D1 OILS chairman Karl Watkin yesterday said he hoped to sew up the $6bn Asian biodiesel market as his company announced two deals.

Although the Teesside-based company announced losses of £3m in its first year of trading yesterday, Mr Watkin said this was to be expected as revenues were not yet forthcoming.

D1 also announced it was placing new shares this month to raise funds of £25.8m. The extra cash will help it fund new partnerships and plantations throughout Africa and Asia.

D1 is planting thousands of hectares of jatropha plants to turn into biodiesel.

Yesterday it announced a conditional 50-year joint venture with a Chinese company to develop a jatropha biodiesel refinery and feedstock supply business with a capacity of producing 500,000 tonnes a year.

It also said it had signed a second agreement in Saudi Arabia to reclaim 300,000 hectares of land for its crop.

Mr Watkin said: "The two biggest markets in the world for biodiesel will be India and China, and with the new developments, we have got both markets pretty much stitched up. Each is worth about $3bn.

"Between them there is probably about five to six billion dollars worth of opportunity there for us.

"And we have been first off the block into those markets.

"We have got lots of work in the pipeline, but the other thing is that this new Saudi deal is bigger than our first deal and expands our presence in the Middle East.

"It is quite fun selling oil to the Arabs. It's like selling coals to Newcastle."

Mr Watkin added that the £3m losses were much less than expected and that D1 was ahead of budget in its first year of trading.

"We have beaten just about every target we set ourselves," he said. "And we have spent less money than we anticipated."

Philip Wood, chief executive, said: "The placing and new joint ventures will enable us to expand much more rapidly. We have increased our total planting targets seven-fold since last October.

"We expect China and India to be two of the largest markets in the world for biodiesel and we now have an exciting new joint venture in China with the potential to put us in a market leadership position."