Government Invites BP And RIL To Set Up Petrol Pumps In India
BP had already said that it wants to ramp up its presence in the downstream business.
The Indian government has formally invited BP Plc. and Reliance Industries Ltd. to start retail operations in India. The two energy giants already have a partnership for 21 oil and gas production sharing contracts, with BP holding 30 percent stake in the company.
Oil Minister Dharmendra Pradhan who met BP’s chief executive officer Bob Dudley and Reliance Industries Chairman Mukesh Ambani in Delhi on Thursday, tweeted a picture of the meeting after it concluded, formally inviting the two companies to set up retail operations in India.
Reliance Industries already operates 1,221 petrol pumps in India selling an average of 300 kilo litres per month, per outlet. The refining giant has a market share of 5 percent in retail diesel sales, as per the company’s filing with exchanges. Its retail arm had a revenue of close to Rs 5,700 crore in the last financial year.
BP had uploaded a presentation earlier this month, which said the company wants to increase its presence in the fuel retailing business. Tufan Erginbilgic, the chief executive officer of BP’s downstream business, has been quoted in the presentation as saying that “a downstream business is safer and more resilient, with material and sustainable earnings growth potential.”
The retail business contributed nearly 40 percent to BP’s earnings in the last calendar year, according to the presentation. The energy major has a set a target of generating $13-14 billion free cash flow from its downstream business in 2021. The company also wants to expand its footprint in “new material growth markets” like Mexico, India, Indonesia and China, by setting up 3,000 retail networks in these countries, according to the presentation.