MUMBAI: Reliance Industries has exited its African fuel retail business by selling its entire 76% stake to Total SA of France for an undisclosed sum.
Total will acquire Gulf Africa Petroleum Corp’s (GAPCO) assets in Kenya, Uganda and Tanzania.
RIL’s overseas arm, Reliance Exploration & Production DMCC, owned 76% stake in GAPCO, while Fortune Oil Corp, Mauritius held the remaining. Total is acquiring stake of both the companies. Financial details were not disclosed. “The net proceeds for the sale will be finalised on completion of the transaction, which is expected to be within the coming months,” RIL said in a statement.
GAPCO is one of the leading petroleum marketing firms in East Africa, with 108 retail outlets and owns 260 thousand kilolitre of storage capacity.
RIL, which has a net debt of around Rs 95,000 crore, has been looking to shed some of its assets, with crude oil prices falling in the last 12 to 18 months. The company has been focussing in other areas, including telecom, where it will roll out 4G network Jio this year.
In July 2015, RIL, along with Pioneer Natural Resources Co, sold its stake in EFS Midstream LLC, the US shale oil and gas pipeline joint venture, to New York-listed Enterprise Product Partners for over $1 billion.
“Gapco’s share was very small in the East African retail market but it has large storage tankage whereas Total has a much bigger market share and small tankage. So it makes good sense for Total to buy Gapco,” said Tushar Bansal, senior consultant at Singapore-based energy consultancy FGE.