RIL Ties Up With BP To Expand Fuel Retail Business
Reliance Industries Ltd. said it would form a joint venture with British oil-and-gas explorer BP Plc. to expand retailing of fuels in India.
The Mukesh Ambani-owned company said it would hold 51 percent stake in the new venture, with BP holding the remaining share, according to a statement. The venture will also take over Reliance’s auto fuel network in India and its aviation fuel business.
RIL said it expected the final agreements for the venture to be reached this year and the transaction to be completed in the first half of next year, subject to regulatory and other approvals.
India is expected to be the fastest-growing fuel market in the world over the next 20 years, with the number of passenger cars in the country estimated to grow almost sixfold over the period, the company said. The venture, it said, will incorporate and build on RIL’s fuel retailing network, which the partners aim to quadruple to 5,500 sites over the next five years.
This isn’t the first time the two companies have entered into an agreement. In 2011, BP acquired a 30 percent stake in RIL’s portfolio of exploration and production interests in offshore India, including the KG D6 gas-producing block off the east coast. The companies have sanctioned three new gas developments in the KG D6 block since then. The two companies have been partners since 2011 and recently sanctioned three new developments in the KG D6 block.
The venture, according to the statement, will seek to expand its reach, broadening access through mobile fueling units and providing packaged fuels to customers, including home-delivery. It will also have access to fuel supplies from RIL’s Jamnagar refining complex in Gujarat.
The “robust” partnership in developing gas resources in India has now expanded to fuel retailing and aviation fuels, Ambani, chairman and managing director of RIL, was quoted as saying in the statement.
Bob Dudley, group chief executive officer of BP, said India is set to be the world’s largest growth energy market by the mid-2020s. He said the company was working closely with Reliance to develop India’s gas resources, helping meet the country’s demand for the key fuel.