In this list
Electric Power | Energy Transition | Natural Gas

BP, Reliance take on Indian state refiners for slice of lucrative retail market

Commodities | Electric Power | Electricity | Energy | Nuclear | Energy Transition | Renewables | Natural Gas | Natural Gas (European) | Oil | Crude Oil | Refined Products

Market Movers Europe, Nov 29-Dec 3: Oil slumps on COVID-19 concerns as travel restrictions announced

Energy | Energy Transition | Natural Gas

Methane Performance Certificate Assessments

Oil | Natural Gas (European) | Natural Gas | LNG | Renewables | Emissions | Energy Transition | Nuclear | Electric Power Risk | Electric Power | Emissions | Coal | Energy | Electricity

Europe energy price crisis

Energy | Energy Transition | Electric Power | Natural Gas | Renewables | Electricity

RWE secures concession for 1 GW Thor wind farm off Danish coast

Energy | Oil

Fuel for Thought: OPEC+ to set tone for 2022 with response to US oil release, COVID-19 variant

BP, Reliance take on Indian state refiners for slice of lucrative retail market


Reliance, BP aim for 5,500 retail fuel stations over four-five years

BP, Reliance partnership a win-win for both: Platts Analytics

Uphill task for private firms in a sector dominated by state refiners

BP has launched an ambitious plan to expand presence in India's retail fuel sector through a partnership with Reliance Industries, but both the firms will increasingly need to blend offerings of conventional fuels with new energy to make inroads into a sector largely dominated by state refiners, analysts told S&P Global Platts.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The launch of a maiden mobility station jointly by Reliance and BP -- under the Jio-BP brand -- in the Maharashtra state in October is part of the companies' plan to rebrand more than 1,400 existing Reliance fuel stations as Jio-BP and expand the network up to 5,500 fuel stations over the next four-five years, according to analysts.

"The joint-venture is a win-win situation for both as BP can leverage on Reliance's presence in India, with the former sharing BP's extensive global experience," Lim Jit Yang, advisor for Asia-Pacific oil markets at S&P Global Platts Analytics said. "At the same time, it will bring more competition to the retail market, which should be beneficial for consumers."

The number of global oil majors weighing options to invest in India's retail fuel space has been growing as pricing deregulation has made its attractive for private firms to compete with the state-owned companies. BP joins Royal Dutch Shell, which was the first overseas oil major to venture into the Indian fuel market.

Saudi Aramco is also in talks to enter the Indian market, and France's Total has held talks on the possibility of investing in the country's retail fuel sector.

"India's market for fuels and mobility is rapidly growing. It is expected to be the fastest-growing fuels market in the world over the next 20 years," Reliance and BP said in a joint statement, adding that the Jio-BP mobility stations would also offer electric vehicles charging and other low-carbon solutions in the future.

Uphill climb

India currently has more than 60,000 retail fuel outlets, with three state-run firms -- Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp. -- accounting for more than 90% of the market share.

Reliance and BP would have to provide better fuels to compete with the state refiners, Vibhuti Garg, lead India energy economist at the Institute for Energy Economics and Financial Analysis, said.

"The fuels with additives, which Reliance and BP plan to offer at their mobility stations, should appeal to consumers as the fuels, according to the company, would add a protective layer on critical engine parts," she said.

Jio-BP also aims to expand its presence in the aviation fuel sector by marketing to 45 airports, up from 30, in the coming years.

However, the road for private players is not going to be smooth, due to the state-run companies' dominance, analysts said.

International oil majors bring decades of global experience in the retail fuel segment, but building infrastructure and finding pockets of opportunities in the vast network of fuel stations built and operated by the state-run oil marketing companies is a huge challenge, according to analysts.

Clean energy scope

Reliance and BP also plan to set up a network of electric vehicle charging and battery swap stations.

"We have already started piloting for the next phase of battery swaps in two-wheelers and three-wheelers," Sashi Mukundan, president, BP India, said at the India Energy Forum by CERAWeek.

The companies have already announced a tie-up with BluSmart, India's first and largest electric ride-hailing platform.

The move is in line with BP's global strategic shift to become an integrated energy company, and is part of a plan by Reliance, the country's biggest private refiner, to invest $10 billion in the next three years in clean energy initiatives, analysts said.

Reliance has separately undertaken several projects in the clean energy space, apart from its partnership with BP.

Its green energy business is rapidly scaling up with investments in the solar, battery and hydrogen segments, Bernstein said in a research note. Reliance has announced a series of partnerships with total investments of up to $1.2 billion since August.

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

"We have started producing gas along with Reliance at KG-basin and we should be getting up to by the end of 2023 to roughly about 30 million cu m/d of gas," Mukundan said at the India Energy Forum.

"We are looking at gas in a more wholistic manner as companies and countries transition -- we are looking at gas to power, gas for transport, and even compressed bio gas," he said.