ANALYSIS: From upstream to EV charging, Reliance, BP widen India's energy footprint

Reliance Industries and BP have taken their partnership one step further by eying a bigger footprint in India's electric vehicles charging segment, expanding the scope of their marriage that also aims to expand retail fuels presence and boost upstream gas production.

The recent move by Reliance and BP to partner with BluSmart, India's first and largest electric ride-hailing platform, is part of plans by the country's biggest private refiner to invest $10 billion in the next three years in clean energy initiatives.

It also is in line with BP's global strategic shift to become an integrated energy company, with India being a key focus, analysts said.

"Although both Reliance and BP will maintain their focus on retail fossil fuels and upstream gas production in India, they will increasingly speed up efforts to capture the new energy space by tapping each other's expertise. This is to ensure that they can have an early mover advantage in a growth market," said Kang Wu, head of Asia Analytics at S&P Global Platts.

Earlier in September, Jio-BP, the fuels and mobility joint venture between Reliance and BP, announced the partnership with BluSmart to set up a network of commercial large-scale EV charging stations. Jio-BP aims to set up these stations for passenger electric vehicles and fleets across the country.

BluSmart through its all-electric fleet has been providing zero-surge and zero-tailpipe emissions ride-hailing services in the Indian capital. Running the largest fleet of EVs, BluSmart expects to expand its network into other major cities across India, Reliance said.

Both Reliance and BP will collaborate in planning, development and operation of EV charging infrastructure at suitable locations across cities where BluSmart operates, it added.

"Jio-BP will be at the forefront of EV infrastructure development in the country. Leveraging BP's learnings from the UK with BP Pulse, where they have the country's largest EV charging network, from Germany through their Aral brand, Jio-BP intends to bring in the latest in EV technology to our consumers," Jio-BP CEO Harish Mehta said.

Eying more partnerships

Jio-BP also is actively partnering with leading technology and platform companies for setting up its EV charging stations for all vehicle categories, Reliance said.

Vibhuti Garg, lead India energy economist at the Institute for Energy Economics and Financial Analysis, said the partnership with BP and BluSmart shows Reliance's intent to play a bigger role in decarbonizing the transport sector at an accelerated pace.

"With Reliance, we will see the scale and also adoption of the latest technology. This will further bring the prices down. Also, it will bring in the required investments that are required for adoption of electric vehicles and building an ecosystem where charging infrastructure will be key for faster adoption of EVs," she added.

BP's ambition to transform into an integrated energy company will strengthen its hands to play a much bigger role in India's transition toward cleaner fuels, BP officials said.

The views from BP echoes comments from Reliance Chairman Mukesh Ambani, who has pledged to embrace cleaner forms of energy, such as hydrogen, as part of efforts toward making Reliance a net carbon-zero company by 2035.

Retail fuel focus

In July 2020, BP and Reliance launched the Jio-BP retail venture. The JV is aimed to expand the current fuel retailing network to up to 5,500 sites in the next five years from more than 1,400 at present. In addition, Jio-BP aims to boost its presence in aviation fuel marketing to 45 airports from 30 in coming years, company officials said.

Reliance and BP in 2018 set up India Gas Solutions Pvt. Ltd., a 50-50 joint venture to source and undertake marketing of gas in India, with BP officials saying gas would remain a key priority for the company in India.

In the gas segment, Reliance and BP announced in April the start of production from the Satellite Cluster gas field in block KG-D6 off the east coast of India. The two companies have been developing three deepwater gas projects in block KG-D6 -- R Cluster, Satellite Cluster and MJ field.

"Our JV brought two of our three toughest deepwater gas projects to production. We are now on course to bring the third Deepwater MJ field onstream in the last quarter of 2022," Ambani said recently, adding that they were aiming to produce 30 million cu m/d of gas by 2023.

The pledge by Reliance to invest $10 billion in the next three years in clean energy might serve as a wakeup call for other oil companies. Nevertheless, analysts said Reliance is also pursuing investments in the petrochemicals space as well -- a sign of how the company is striking a balance between new energy and its core businesses.