Reliance, BP form major fuel retail joint venture in India

Reliance, BP to form major fuel retail joint venture in India

4:35 AM, 7th August 2019
File photo of BP’s Bob Dudley (left) and RIL chairman Mukesh Ambani (Photo: Reuters)
File photo of BP’s Bob Dudley (left) and RIL chairman Mukesh Ambani (Photo: Reuters)

MUMBAI, INDIA/ LONDON, UK: Reliance Industries Limited (RIL) and BP Plc have agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India.

The heads of agreement was signed by Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited and Bob Dudley, Group Chief Executive of BP.

Building on Reliance's existing Indian fuel retailing network and an aviation fuel business, the partners expect the venture to expand rapidly to help meet the country's fast-growing demand for energy and mobility. This is a further development of RIL and BP's longstanding partnership, which began in 2011 and expanded in 2017 including agreement to seek options to work together to develop differentiated fuels and mobility businesses.

RIL and BP's venture will incorporate and build on RIL's current fuel retailing network of over 1,400 sites across India, which the partners aim to grow rapidly to up to 5,500 sites over the next five years. This joint venture will also include RIL's aviation fuels business, which currently operates at over 30 airports across India, providing participation in this rapidly-growing market.

RIL will assume 51 percent stake of the joint venture, where in BP will have 49 percent. The JV will assume ownership of RIL's existing Indian fuel retail network and access its aviation fuel business. It is anticipated that final agreements will be reached during 2019 and, subject to regulatory and other customary approvals, the transaction will be complete in the first half of 2020. 

The new venture will seek to offer Indian consumers high-quality differentiated fuels and services at its network of sites, benefitting from RIL's extensive retail business experience and market-leading access and digital connection to consumers through its Jio digital platform. 

BP will bring its international experience in convenience and fuel retailing and aviation operations. Castrol lubricants will also be available across the venture's network. The venture will seek to expand its reach, broadening access through mobile fuelling units and providing packaged fuels to customers, including home-delivery. The venture is also expected to benefit from access to competitive fuels supplies from RIL's Jamnagar refining complex in Gujarat on the west coast of India, the world's largest refinery complex. 

“We are delighted to expand our partnership with BP, one of the global leaders in the fuel-retailing sector. This partnership is a testimony to the strong ties between BP and Reliance. Our robust partnership in developing gas resources in India has now expanded to fuel retailing and aviation fuels. This transformative partnership will deepen our engagement with the consumers in further enhancing the world-class services across the country,” said Mukesh Ambani.

"India is set to be the world's largest growth market for energy by the mid-2020s. BP is already a large investor here and we see further attractive, strategic opportunities to support this growth. We are working closely with Reliance to develop India's gas resources, helping meet the country's demand for that key fuel. Together we will work to provide consumers across India the high-quality fuels, convenience retail and services they need, continuing to drive modernisation and mobility solutions across the country,” added Bob Dudley.

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