July 9, 2020 / 4:00 PM / a month ago

BP pays India's Reliance $1 billion to set up petrol station venture

FILE PHOTO: A BP logo at a petrol station in London, Britain January 15, 2015. REUTERS/Luke MacGregor/File Photo

LONDON/NEW DELHI (Reuters) - BP has paid Reliance Industries $1 billion (792 million pounds) to set up a joint network of thousands of petrol stations across India to tap the country’s rapidly growing energy demand.

BP will hold 49% and Reliance the remaining 51% in the new company called Jio-bp, which will expand Reliance’s current 1,400 retail sites up to 5,500 over the next five years, the pair said in a statement on Thursday after announcing the venture last August.

Jio-bp will also expand from 30 to 45 airports and plans to increase its staff from 20,000 to 80,000 over five years.

The plan comes as billionaire Mukesh Ambani, the owner of Reliance, which operates the world’s biggest refining complex in Jamnagar, is currently in talks with oil group Saudi Arabia’s Aramco to sell a 20% stake in the oil to chemical conglomerate.

UK oil group BP, along with many industry peers are aiming to sharply increase their global customer base in the coming decades as part of their shift to low-carbon energy, aiming to supply fuels and power even as demand for oil is expected to decline.

Jio-bp aims to provide Indian consumers with advanced fuels with lower emissions, electric vehicle charging and other low carbon solutions over time, the statements said.

India “is a country that will require more energy for its economic growth and, as it prospers, its needs for mobility and convenience will accelerate,” BP CEO Bernard Looney said in a statement.

Shell and Abu Dhabi National Oil Co (ADNOC) also both want to strengthen their presence in India.

Indian Prime Minister Narendra Modi wants Asia’s third largest economy to grow from $2.9 trillion gross domestic production in 2019 to $5 trillion by 2025, which is set to drive energy demand higher.

Reporting by Ron Bousso; Editing by Elaine Hardcastle

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