Reliance Industries and BP have agreed to set up a 51:49 joint venture to operate their fuel retailing business, targeting expanding number of filling stations to 5,500 in five years and offer home delivery of fuel.
Reliance Industries chairman Mukesh Ambani and BP group chief executive Bob Dudley signed heads of agreement for the venture in Mumbai on Tuesday. Final agreements will be reached later in 2019 and the transaction, subject to regulatory approvals, will be completed in the first half of 2020, the firms said in a statement.
BP obtained a licence to market transportation fuel in India three years ago but didn’t begin. It, instead, decided to explore partnership with Reliance for fuel retailing. BP already has stake in RIL’s upstream business.
Reliance has been cautious in expanding its fuel retail network in the past five years. By comparison, its rival Nayara Energy (formerly Essar Oil) expanded much faster since 2014 when diesel sales were deregulated again.
“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,” Bob Dudley said.
The JV will benefit from access to competitive fuels supplies from RIL’s Jamnagar refining complex in Gujarat. The new venture will benefit from RIL’s extensive retail business experience and digital connection to consumers through its Jio digital platform, as per the statement.
