NEW DELHI/LONDON—Global oil major BP is extending its ties with Indian conglomerate Reliance Industries, operator of the world’s biggest refining complex, by forging a fuel-retailing joint venture to capitalize on rising demand in Asia’s third-biggest economy, Reuters reports.
BP will own a 49% stake in its new Indian joint venture, with the remainder held by Reliance. Financial details of the deal were not disclosed.
The two companies have combined forces in the past. In 2011, BP acquired a 30% stake from Reliance in some of its exploration blocks and formed a gas sourcing and marketing tie-up. Six years later, the two companies agreed to explore options for developing alternative fuels and mobility businesses.
The new venture will combine Reliance’s 1,400-plus retail fuel stations and its aviation fuel business spread at 30 Indian airports. Plans call for expanding that retail fuel network to up to 5,500 sites in the next five years. The International Energy Agency expects the South Asian nation to account for a quarter of global energy use by 2040. In a joint statement announcing the agreement, Bob Dudley, chief executive of BP, said India is set to be the world’s largest growth market for energy by the mid-2020s.
Reliance and BP hope to finalize the agreement by the end of December and close the transaction by June 2020. Currently, the only foreign players in India’s retail fuel network are Royal Dutch Shell and Russia’s Rosneft, through its Nayara Energy business.
BP operates gas stations and convenience stores across 18 countries with more than 18,700 sites. Recently, the company announced plans to build a network of electric vehicle charging hubs in partnership with China’s Didi Chuxing, betting on the world’s largest market for e-cars.