Indian Oil to open retail outlet in Saudi Arabia in six months

To mark its retail presence in West Asia, Indian Oil Corporation (IOC) is expected to start its first retail outlet in Saudi Arabia in six months by creating an equal joint venture (JV) company with Riyadh-based Al Jeri Group.

According to their plans, at least 200 retail outlets will be set up initially in Saudi Arabia. IOC’S foray will be significant as Saudi’s national oil company Saudi Aramco was looking to enter the Indian downstream market through a tie-up with Mukesh Ambani-led Reliance Industries.

During the recent visit by Prime Minister Narendra Modi to Saudi Arabia, an agreement was signed between IOC’S Middle East unit and Al Jeri Group, a local company specialising in the transport and delivery of bulk petroleum products as well as other bulk transports.

“This will be a 50:50 JV as the local regulations require a partner from Saudi Arabia for retail entry. We will also be selling our lubricants in that country, which is being sold through an agent,” said Gurmeet Singh, director marketing of IOC. Singh said the companies were waiting for some local clearances. “We have not decided on the number of outlets that we are going to come up with,” he said.

According to Al Jeri, it transports more than 28 per cent of all Aramco products, making it the biggest Aramco products transporter in the region. It also offers services at all major Gulf Cooperation Council (GCC) border crossings. “There is enough local demand in both fuel and lubricant space in Saudi,” he said.

IOC has marketing subsidiaries in Sri Lanka, Nepal, and Mauritius. Singh said IOC was also looking to enter fuel marketing and retail business in Myanmar, too. This was after Myanmar Petroleum Products Enterprise (MPPE) invited private companies to form a JV for importing, storage, distribution, and sale of all petroleum products.

IOC is also in the process of laying a pipeline between Raxaul in Bihar and Amlekhgunj in Nepal at a capacity of 1.3 million tonne per annum.

Apart from Aramco, other companies, including Russian giant Rosneft, French major Total, Abu Dhabi National Oil Company (Adnoc), and Kuwait Petroleum International (KPI), have shown interest in Indian market.

Several foreign players, including Saudi Aramco, BP, Exxonmobil, and Total, are also expected to participate in the proposed strategic sale of Bharat Petroleum Corporation (BPCL).