BP Invest $200mn into Upgrade its Retail Outlets

BP could plough up to $200 million or more into upgrading and rebranding its retail petrol outlets in a bid to compete with supermarket chains Woolworths and Coles, should proposed changes to legislation go through parliament.

Existing legislation limits the amount of retail outlets oil refiners can operate, but rivals Caltex and Shell have effectively bypassed the legislation by forming marketing alliances with Woolworths and Coles respectively.

BP can only directly operate 87 of the 250 outlets it owns, with the balance being run by franchisees.

If the ban were lifted as proposed under the Government's new Oil Code, BP could move to buy out the franchisees and roll out a new uniform petrol, convenience store and cafe offering over a five-year period. The legislation was introduced to the lower house last week.

Upgrading would involve having to rebuild and totally revamp many sites, which would cost about $2 million-$5 million per site, Mr Salter said.