BluForest Inc to pre-sell carbon credits from REDD project in Ecuador to non-existent UK company

BluForest Inc claims to be setting up REDD projects in Ecuador. It plans to generate carbon credits from 105,000 hectares of land in Ecuador. BluForest announced last week that it had signed a letter of intent with Global Fuel Limited for the pre-purchase of carbon credits.

REDD-Monitor wrote about BluForest last week. The company’s background is in oil, gas and mining. It has few staff and no experience in carbon trading or forest conservation. It also has a background in alleged a $10 million pump and dump share scam.

BluForest does not have permission from the government in Ecuador for its REDD projects. It hasn’t hired consultants to guesstimate how many carbon credits the projects might generate. According to BluForest’s website, 90% of the REDD project area is inside the Sangay National Park, which was declared a UNESCO World Heritage Site 30 years ago.

BluForest estimates that the carbon credits pre-sale deal with Global Fuel could bring BluForest US$12 million per year.

In a press release, Charlie Miller, CEO of BluForest, explains that,

“Although the terms of the contract have yet to be defined, Global Fuel has showed an interest in working with BluForest in promoting carbon free oil and this pre-purchase of carbon credits opens a huge market within the shipping industry to help offset their carbon output.”

In the press release, BluForest states that Global Fuel Limited is based in London, England. A company with that name was registered at Companies House in 2002. But my guess is that the terms of the contract with Global Fuel will never be defined, for the simple reason that Global Fuel was dissolved in October 2009.

Yesterday, BluForest issued a correction to its press release about the letter of intent with Global Fuels:

The LOI with Global Fuel Ltd. (“Global Fuel”) is structured such that a prepayment of $12,000,000 by Global Fuel will be made for the delivery of the Carbon Credits and will be for a period not to exceed 24 months. At that time Global Fuel expects the estimated 210,000 tonnes of Carbon Credits to have been, Validated, Verified, Certified and ready for market. If for whatever reason the Credits are not delivered as agreed to Global Fuel will consider the agreement in default and move to have the prepayment funds reclassified as a loan to BluForest.

So, it appears that Global Fuel is considering buying 210,000 REDD credits for US$12 million. That’s about US$57 each – which is more than five times the highest price for REDD credits I’ve come across recently.¹ The fact that Bluforest’s Ecuador project doesn’t even exist yet, just makes the price even more generous. And if the carbon credits don’t materialise? Absolutely no problem. Global Fuel will simply lend the money to BluForest. Unbelievable, isn’t it?

BluForest’s press release about Global Fuel is part of the current promotion to boost BluForest’s share price. As hotstocked.com points out, so far that’s not been going too well. The share price hit US$2 on 5 August, since when it’s been bouncing lower and lower:

Yesterday, George Sharp, an ex-shareholder in Greenwood Gold Resources (BluForest’s name before a reverse take-over in February 2012), announced that Jim Can’s name had been added to a lawsuit against BluForest for fraud, negligent misrepresentation, and deceit. According to Sharp, Jim Can is the “de facto head of BluForest”. (You can read more about Jim Can and his alleged role in Greenwood Gold Resources and Bluforest, here.) In his press release, Sharp comments that,

Jim Can’s execution of a pump and dump campaign on Greenwood Gold Resources and then reverse split out the shareholders, was pre-meditated, as is the current scheme on BluForest, Inc., where the company has deliberately and falsely overvalued the carbon credit assets of the properties in Ecuador, if any such assets even exist.

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1. Here are some of the carbon credits prices from REDD and forestry projects listed in the past three months in Carbon TradeXchange newsletter:

Kasigau Corridor, Kenya: £7.50
Forestry project, Guatemala: US$9.00
Choco-Darien Corridor REDD project, Colombia: US$10.00
Forestry project, Mexico: US$10.00
Acacia Plantations in Brazil: US$7.00
Avoided deforestation, Australia: AU$9.50
Amazon REDD project, Brazil: US$4.50