The Hindu Business Line : Reliance buys majority stake in African oil retailer

Reliance Industries said that it has acquired a majority stake and management control in an East Africa-based oil retail distribution company Gulf Africa Petroleum Corporation (GAPCO).

Reliance did not disclose the financial details of the acquisition made through its wholly owned subsidiary Reliance Industries Middle East (RIME), a company registered in the United Arab Emirates.

GAPCO, which is headquartered in Mauritius, has a presence in East Africa in the petroleum downstream sector. It owns and operates storage terminals in Dar-es-Salaam (Tanzania), Mombassa (Kenya) and Kampala (Uganda), and has other well spread depots in East and Central Africa. In addition, it runs over 250 outlets covering retail and industrial segments.

Growing demand

Reliance described the acquisition as strategic, helping it achieve its “global vision in the petroleum downstream sector.” The demand for petroleum products in the East African countries is rising steadily and has mirrored the rapid GDP growth, it said in a statement: “Import of petroleum products in these countries is also expected to rise in the near future.”

Further, these markets are easily accessible from India and in that sense provide a strategic fit for exports from India, it said.

RIL operates a refinery with a capacity of 6,60,000 barrels per day at Jamnagar in Gujarat. Another refinery with a capacity of 5,80,000 bpd is being established in the same region by Reliance Petroleum Ltd.

The GAPCO buy will help it integrate the value chain consisting of refining, shipping, trading, terminalling and marketing through both retail and wholesale segments, said the statement.

“This will help Reliance establish a natural marketing link for its refinery products and capture value up to the last mile in the global petroleum value chain,” it said.

An Africa-based Web site said GAPCO was formed in 1992 to acquire the retail petroleum marketing assets of Esso in Tanzania, Uganda and Mauritius. The company is principally owned by brothers Yogesh and Dhiran Kotak who have a wide range of commercial interests in Tanzania and the neighbouring countries.

RIL shares rose by 0.82 per cent on Tuesday, closing at Rs 1971.50 on the BSE.