NEW DELHI: Mukesh Ambani-led Reliance Industries Ltd (RIL) has inked a joint venture agreement with global energy giant BP, under which the new entity will enter the fuel retailing and aviation fuel business. RIL will hold a 51 per cent stake in the joint venture while BP will hold 49 per cent, the companies said on Tuesday.
“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,” RIL said. Both BP and RIL also hold licenses to set up fuel retail outlets across India, with the former acquiring permits to set up 3,500 outlets and RIL for 5,000.
“India is set to be the world’s largest growth market for energy by mid-2020s. BP is already a large investor here and we see further attractive, strategic opportunities to support this growth,” said Bob Dudley, Group Chief Executive, BP.
According to an official statement, the new venture will seek to offer Indian consumers high-quality differentiated fuels and services at its network of sites, benefitting from RIL’s retail business experience, market 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,” it said.
“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 firms added.
BP and RIL have had a longstanding partnership in the Indian energy market already, with the former buying a 30 per cent stake in several of RIL’s oil and gas production-sharing contracts in 2011. The two firms also have a 50:50 joint venture — India Gas Solutions — in the gas marketing segment. The two further enhanced their ties with an agreement in 2017 to work together on developing differentiated fuels and pursue opportunities in the mobility businesses.