RIL and Essar interested in BP's retail outlets in four countries in Africa

 Reliance Industries Ltd and Essar Oil  have joined the race for BP assets.

RIL and Essar are interested in BP's retail outlets, terminals and aviation turbine fuel (ATF) facilities in at least four countries in Africa.


RIL and Essar are among a dozen companies, including PetroSA, who are evaluating the sale of BP retail assets in Africa. When asked, spokespersons of the two companies said they did not comment on speculation.


A PTI report said BP was selling retail outlets, terminals and aviation fuel stations in Botswana, Tanzania, Namibia, Malawi and "possibly" Zambia, to cover costs related to the worst oil spill in US history.


BP controls as much as 70-80 per cent of the ATF market in some African countries. "BP, that roughly has around 20 per cent market share in these countries, had been trying to sell its retail assets in Africa prior to the spill. It is part of a trend among global companies to focus attention in the upstream oil and gas production business," he added.


RIL and Essar are both present in Africa, with RIL having a major storage facility in Kenya. RIL currently exports fuel to Gulf Africa Petroleum Corp (Gapco), a company it had acquired in 2007. Gapco has retail outlets in Uganda, Tanzania and Kenya. Essar Oil had last year acquired a 50 per cent stake in a four million-tonne a year Kenya Petroleum refinery in Mombasa.



Both RIL and Essar have refineries back home and with domestic markets being unfavourable, a foothold in Africa will help them in pushing petro products in the export market. "The margins in these countries is almost double that of the Indian market," said the executive.


http://business.rediff.com/report/2010/jul/29/ril-and-essar-to-bid-for-bp-assets-in-africa.htm