Reliance Industries on Thursday finalised a deal with BP in fuel retail following which BP paid $1 billion to pick up a 49 per cent stake in the joint venture. The much-awaited tieup will see retail petrol pumps of Reliance being rebranded as “Jio-BP”.
RIL will hold 51 per cent in the joint venture. In August last year, RIL and BP had announced a new joint venture to sell auto fuel and ATF in the country. The partnership hopes to extend their alliance in oil exploration and expand Reliance’s network of petrol pumps to 5,500 over five years from 1,400 at present.
RIL had then said that the investment from BP is to be seen in the context of a strong growth in fuel demand over the next two decades and that during this period India would become the fastest growing market for fuels, with the number of cars estimated to grow almost six-fold.
While RIL has been in the news for mobilising over Rs 1.17 lakh crore in its digital services arm, the completion of the transaction with BP was also awaited.
It will further help in bringing down the debt at RIL. RIL has already claimed that it is net debt free company following the series of investments in Jio Platforms and it rights issue.
In a late evening statement, RIL while announcing the beginning of their new Indian fuels and mobility joint venture-Reliance BP Mobility Ltd (RBML) said that following initial agreements in 2019, both the partners have worked closely over the past few months in a challenging environment to complete the transaction as planned and that bp has paid RIL $ 1 billion for a 49 per cent stake in the joint venture, with the latter holding 51 per cent.
Operating under the “Jio-bp” brand, the joint venture is looking to become a leading player in India's fuels and mobility markets. It will leverage Reliance’s presence across 21 states and its millions of consumers through the Jio digital platform. bp will bring its extensive global experience in high-quality differentiated fuels, lubricants, retail and advanced low carbon mobility solutions.
Sources had earlier indicated that other services relating to Jio like recharge will also be provided at the outlets.
Both the partners expect the venture to grow rapidly to help meet India’s fast-growing demands for energy and mobility. RBML aims to expand from its current fuel retailing network which it said would require a four-fold increase in staff employed in service stations – growing from 20,000 to 80,000 in this period. The joint venture also aims to increase its presence from 30 to 45 airports in the coming years.
The statement added that the new joint venture aspires to provide Indian consumers with advanced fuels with lower emissions, electric vehicle charging and other low carbon solutions over time. RBML has received the marketing authorization for transportation fuels, amongst other necessary regulatory and statutory approvals.
The joint venture will begin selling fuels and Castrol lubricants with immediate effect from its existing retail outlets, which will be rebranded to “Jio-bp” in due course, it added.
“Reliance is expanding on its strong and valued partnership with bp, to establish a pan-Indian presence in retail and aviation fuels. RBML will aim to be a leader in mobility and low carbon solutions, bringing cleaner and affordable options for Indian consumers with digital and technology being our key enablers’’, Mukesh Ambani, Chairman and Managing Director, RIL said.
