Mumbai: BP and Reliance Industries Limited (RIL) Tuesday announced that they have agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India. 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.
India is expected to be the fastest-growing fuels market in the world over the next 20 years, with the number of passenger cars in the country estimated to grow almost six-fold over the period. 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 CMD Mukesh Ambaniging and BP Group Chief Executive Bob Dudley signed heads of agreement for the venture, here on Tuesday.
Mukesh Ambani said: “We are delighted to expand our partnership with BP, one of the global leaders in the fuel-retailing sector. Our robust partnership in developing gas resources in India has now expanded to fuel retailing and aviation fuels. ”
Bob Dudley said: “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.”
The partners have agreed to set up a new joint venture company, held 51% by RIL and 49% by BP, that 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.
After initial co-operation from 2008 in exploration offshore India, BP and RIL entered into their current partnership in 2011 when BP acquired a 30% interest in RIL’s portfolio of exploration and production interests offshore India, including the major producing KG D6 gas-producing block off the east coast. More recently, since 2017 the partners have sanctioned three new gas developments in the KG D6 block.