Reliance Industries Ltd said it is working to complete contours of a $15 billion deal with Saudi Aramco but did not give a timeline for its completion.
In August last year, RIL ‘s Chairman & Managing Director, Mukesh Ambani, announced talks to sell 20% of the oil-to-chemical (O2C) business, which includes its twin oil refineries in Jamnagar, Gujarat and petrochemical assets, to Saudi Aramco. The deal was due to be signed by March 2020 but was postponed.
“Reliance is working to complete the contours of a strategic partnership with Saudi Aramco,” Ambani said in the firm’s latest annual report without giving timelines.
The partnership with Aramco would give Jamnagar refineries “access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for a higher oil-to-chemicals conversion,” he said.
“Reliance and Aramco share a common outlook and vision on the evolution of the business in the future with emphasis on higher oil-to-chemicals conversion,” the company said in the annual report.
With a stake, Aramco would not only have a controlling interest in one of the largest integrated petrochemical complex, but would also have access to one of the fastest-growing markets — a ready-made market for its Arabian crude (500,000 barrels per day) and offering a potentially bigger downstream role in future.
In addition to refineries and petrochemical plants, O2C also has a 51% stake in the fuel retailing market. It does not, however, include upstream oil and gas producing assets such as the flagging block KG-D6 in the Bay of Bengal.
Industry analysts say that the valuation of the deal may change considering the impact of weak global crude oil demand on Aramco’s balance sheet.