Reliance, BP form JV for 5,500 petrol pumps, retail jet fuel

New Delhi: Reliance Industries and UK's BP plc have agreed to form a new joint venture to set up petrol pumps and retail aviation turbine fuel to airlines in India, the two companies said on Tuesday.

Reliance's existing 1,400-odd petrol pumps, as well as 31 aviation fuel stations, will be transferred to the new joint venture where BP will hold 49 per cent equity stake.

Reliance will hold the balance 51 per cent in the entity, which aims to expand the retail network to 5,500 petrol pumps in the next five years, the two firms said in a joint statement.

It, however, did not say if BP will pay Reliance any money for getting near half ownership of the 1,400-odd petrol pumps and jet fuel retailing facilities at 30 airports.

The two firms signed heads of agreement on Tuesday and hope to finalise a sales purchase agreement, which will entail investments, in next few months, an official said.

The agreement with BP comes amidst talks Reliance is holding with Saudi Aramco for a possible sale of a stake in the twin oil refineries at Jamnagar in Gujarat.

Saudi Aramco, which is said to be keen to buy a quarter of 68.2 million tonnes refineries of Reliance, is also looking to venture into fuel retailing in India to tap the world's fastest-growing energy consumer.

This is the third joint venture between Reliance and BP since 2011. BP had in 2011 bought 30 per cent stake in 21 oil and gas exploration and production blocks of Reliance for $7.2 billion. At that time, another 50:50 joint venture, India Gas Solutions Pvt Ltd, was set up for sourcing and marketing gas in India.

"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," Ambani 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," Bob Dudley said.

While Reliance-BP has relinquished all but a couple of oil and gas blocks over these years, IGSPL is at a nascent stage. BP and Reliance in the statement said: "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," it said.