New Delhi: Eight years after partnering with India to produce hydrocarbons, Reliance Industries Ltd and British oil major BP Plc have reunited to open a national network of retail fuel retailers.
The outlets will be created through a new joint venture that will be owned by 51% of RIL and the rest by BP, according to a joint statement by the companies. The partnership will also offer aviation turbine fuel to serve the growing aviation industry in India.
Together, the companies plan to create 5,500 service stations across the country, which may include 1,378 retail outlets currently independently operated by RIL in India.
RIL and BP did not disclose the investment in the new venture. They also did not provide a time frame for setting up retail outlets.
mint on December 6, 2016, announced that the two companies could join a commercial network in India.
"Based on India's existing retail fuel and aviation fuel business, partners expect the venture to expand rapidly to help meet the rapidly growing demand for energy for energy and mobility," RIL said in a statement. .
Mukesh Ambani, chairman and managing director of RIL, and Bob Doodley, CEO of BP, signed the leaders of the Mumbai Joint Undertaking on Tuesday. "Our stable partnership in the development of gas resources in India has now expanded to retail and aviation. This transformative partnership will deepen our commitment to consumers to further improve world-class services across the country, "Ambani said.
BP was licensed to market jet fuel in India in January 2016. In October 2016, it was licensed to create 3,500 fuel retail sites in India. RIL holds a license to open 5,000 retail outlets and plans to double its market share in the fuel trading segment from its current 7-8% share.
It is unclear whether these licenses can be automatically folded into the new venture.
"This joint venture will also include RIL's aviation business, which currently operates at more than 30 airports in India, providing participation in this fast-growing market," said RIL.
Final agreements will be reached in 2019 and subject to regulatory and other routine approvals, the transaction will be completed in the first half of 2020.
BP is a partner of RIL in its exploration and production ventures in the country. In February 2011, London-based BP bought a 30% stake in 21 oil and gas sharing agreements operated by RIL for $ 7.2 billion. They are also partners in India Gas Solutions Pvt. Ltd, a joint venture in the country for gas supply and marketing.
India is one of the few major global markets where demand for fuel is growing and has attracted the attention of foreign fuel traders seeking to gain the upper hand in a country dominated by state-owned fuels.
Dudley said: "India must be the largest energy market in the world by the mid-2020s. BP is already a big investor here, and we see additional attractive, strategic opportunities to support this growth. Together, we will work to provide consumers across India with high-quality fuels, retail convenience and the services they need as we continue to drive modernization and mobility solutions across the country. "
RIL and BP are also partners in India Gas Solutions, a joint venture in the country for gas supply and marketing. In addition, BP has a presence in India through its automotive and industrial brand Castrol lubricants.