India Development News & Foreign Investment Opportunities

BP set to invest Rs.7,000 crore in RIL petrol-retail assets

Retail expansion across India


Retail expansion across India



BP is expected to pay Rs.7,000 crore for a 49% stake in Reliance Industries Limited’s (RIL) petrol-retail business, forming a third joint venture since 2011.

The deal will see transfer of Reliance’s 1,400-odd petrol pumps and 31 aviation fuel stations to a new joint venture between BP and RIL.

The 51-49% RIL led joint venture plans to expand the retail network to 5,500 petrol pumps over the next five years, said the two companies in a joint statement on 6 August 2019.

BP holds 30% stake in Reliance’s 21 oil and gas block since 2011 for which it paid US$7.2 billion. It has another 50:50 joint venture India Gas Solutions since then for sourcing and marketing gas in 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.

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.

The new joint venture will also include RIL’s aviation fuels business expansion.

RIL Chairman and Managing Director Mukesh Ambani said: “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.”

BP Group Chief Executive 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. 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.”

The 51% RIL and 49% BP joint venture is expected to be completed in the first half of 2020.

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.

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.

Since formation of this partnership in 2011, the two companies have invested over US$2 billion in deep-water exploration and production to date.

In addition to the D55 gas discovery announced in 2013, the partnership has combined BP’s technology and skills with RIL’s execution and operational capability to sustain production from the geologically complex reservoirs in D1D3 in KG D6.

This has included the deployment of world-leading technologies for production from deep-water gas fields for the first time in India.

The partners have recently sanctioned three new developments in the KG D6 block: the ‘R-Series’ fields in 2017, the Satellites cluster in 2018 and the MJ project earlier this year.

With total investment of around US$5 billion, development of the three projects together is expected produce a total of around 1 billion cubic feet of gas a day.

The first project, the R-Series development, is expected onstream in 2020.

India Gas Solutions Private Limited, a 50:50 joint venture to source and market gas in India, is also part of BP’s gas value chain alliance with RIL.

With its many investments in India and employing around 7,500 people in the oil, gas, lubricants and petrochemicals businesses, BP is one of the largest international energy companies in India.

BP’s activities include Castrol lubricants; the licensing of competitive etrochemical technologies; oil and gas trading; clean energy projects through investment in Light source BP; IT and procurement back office activities; staffing and training for BP’s global marine fleet; and the recruitment of skilled Indian employees for its global businesses.

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