Mukesh Ambani-led Reliance Industries on Tuesday said it has entered into an agreement with British energy giant BP plc 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," RIL and BP said in a joint statement.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, and Bob Dudley, Group Chief Executive of BP, signed heads of agreement for the venture in Mumbai today.
The RIL will hold 51 per cent stake in this new joint venture (JV) company and BP will own the remaining 49 per cent stake. The JV will assume ownership of RIL's existing Indian fuel retail network of over 1,400 sites across India. The partners aim to expand fuel retail stations rapidly to up to 5,500 sites over the next five years.
The 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.
"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," RIL said in a regulatory filing.
The company anticipated that final agreements will be reached during 2019 and, following requisite approval, the transaction will be completed in the first half of 2020.
Commenting on the development, Mukesh Ambani said: "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."
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, the company said in the exchange filing.
"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," said Bob Dudley, BP Group Chief Executive.
"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," Dudley added.
RIL and BP has longstanding partnership, which began in 2011 when BP acquired a 30 per cent 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. It expanded in 2017 after the partners sanctioned three new gas developments in the KG D6 block.
Edited by Chitranjan Kumar