Indian Oil to open retail outlets in Saudi Arabia in JV with Al Jeri

Indian Oil Corporation (IOC) has entered into an equal joint venture with the Riyadh-based Al Jeri Group in order to expand its retail presence in West Asia. The first retail outlet is expected to be set within six months in Saudi Arabia.

At least 200 retail outlets are planned to be initially set by both companies. This comes at a time when the Saudi's national oil company Saudi Aramco is planning to enter into the Indian downstream market through a tie-up with Mukesh Ambani-led Reliance Industries.

The agreement was signed during Prime Minister Narendra Modi's recent visit to Saudi Arabia, between IOC's West Asian unit and the Al Jeri group, which is a local company having specialisation in transport and delivery of bulk petroleum products as well as other bulk transports.

Mr. Gurmeet Singh, IOC's director (marketing) said, "This will be a 50:50 joint venture as local regulations require a partner from Saudi Arabia for retail entry. We will also sell our lubricants in that country; we currently do that through an agent." He added that the within next six months the first outlet should be set as for now the companies are waiting for some local clearances. "We have not decided on the number of outlets that we are going to come up with," Singh further added.

Al Jeri is the biggest transporter of Aramco products in the region and at present carry more than 28 per cent of the company's products. The cross-border service is also provided by the company at all major Gulf Co-operation Council (GCC) border crossings. Mr. Singh added, "There is enough local demand in both fuel and lubricant space in Saudi".

Currently, IOC has marketing subsidiaries in countries such as Sri Lanka, Nepal and Mauritius and was also looking to enter into fuel marketing and retail business in Myanmar. Myanmar Petroleum Products Enterprise (MPPE) earlier invited private companies to form a joint venture for import, storage, distribution and sale of all petroleum products and thus IOC planned its entry in the country. IOC is also in the process of laying a pipeline between Raxaul in Bihar and Amlekhgunj in Nepal for an annual capacity of 1.3 million tonnes.

Indian market has attracted many other companies including Russian giant Rosneft, French major Total, Abu Dhabi National Oil Company (Adnoc) and Kuwait Petroleum International (KPI) apart from Aramco. Many foreign players, including Saudi Aramco, BP, ExxonMobil and Total, are also likely to show their interest in the proposed strategic sale of government-controlled Bharat Petroleum Corporation.