BP and Reliance Industries Limited (RIL) yesterday signed a definitive agreement relating to the formation of their new Indian fuels and mobility joint venture. This follows the initial heads of agreement signed in August.
The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals. The new venture, a further development of RIL and BP’s long-standing partnership, will include an India-wide fuels retail service station network and aviation fuel marketing business.
Building from RIL’s existing businesses, the partners expect the venture to co-create a world class fuels partnership to grow rapidly and help meet India’s fast-growing demands for energy and mobility. The venture expects to expand from RIL’s current fuel retailing network of more than 1,400 retail sites and 30 aviation fuel stations across India to up to 5,500 retail sites and 45 aviation fuel stations over the next five years to become the most preferred provider of automotive and aviation fuels.
The retail network will operate under the Jio-BP brand, signaling a new paradigm shift in fuels marketing and mobility solutions. It brings together Reliance’s extensive access and connection to consumers through its Jio digital platform and BP’s deep experience in fuel retailing around the world. The joint venture will seek to offer Indian consumers high-quality differentiated fuels, convenience and services. Castrol lubricants will also be available across the venture’s network.
The agreement was signed in Mumbai by Mukesh Ambani, chairman and managing director of Reliance Industries Limited, and Bob Dudley, Group CEO of BP.
“India is one of the world’s most important energy markets – its transport and aviation sectors are growing and evolving rapidly. We aim to meet the country’s growing demand for mobility solutions, high-quality fuels and services through this new venture. This major expansion of our business here reinforces our long-term commitment to India,” said Dudley.
“I am delighted that BP and Reliance are further building on their strong partnership. BP and Reliance are combining their knowledge, expertise and experience to provide Indian consumers world class products and services. We believe that together we will bring solutions that will benefit the fast-growing Indian market,” Ambani said.
The partners intend 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.
With its many investments in India, BP employs around 7,500 people in the natural gas, lubricants and petrochemicals businesses. BP is one of the largest international energy companies in India. In addition to its gas value chain alliance with Reliance Industries Ltd., BP’s activities include: Castrol lubricants; the licensing of competitive petrochemical technologies; oil and gas trading; clean energy projects through its investment in Lightsource 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.
Reliance Industries Limited is India’s largest private sector company, with a consolidated turnover of INR622,809 crore (USD90.1 billion), cash profit of INR64,478 crore (USD9.3 billion), and net profit of INR39,588 crore (USD5.7 billion) for the year ended March 31, 2019. RIL’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services. RIL is the top-most ranked company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Corporations’ – currently ranking 106th in terms of both revenues and profits. The company stands 71st in the ‘Forbes Global 2000’ rankings for 2019 – top-most among Indian companies.