Reliance Industries Limited (RIL) Chairman Mukesh Ambani on Wednesday said the deal to sell 20% stake to Saudi Aramco has not progressed according to the scheduled time due to ongoing pandemic situation.
“Due to unforeseen circumstances in the energy market and the Covid-19 situation, the deal has not progressed according to the original timeline,” RIL chairman Mukesh Ambani said today, without giving more details. “Our equity requirements have already been met.”
“We at Reliance value our over two-decade-long relationship with Saudi Aramco and are committed to a long-term partnership,” Ambani said.
RIL had planned to offload a stake in its oil-to-chemical (O2C) business to reduce its overall debt, which was incurred to expand its oil business, and after investing in retail and telecom ventures.
RIL said in August last year that the deal with Aramco, which values RIL’s oil and chemical divisions at $75 billion including debt, would be concluded by 31 March 2020. It later said the deal would be delayed beyond March.
The Aramco investment covers all of RIL’s refineries and petrochemical assets, including its 51% stake in the retail joint venture with BP. Aramco will supply 500,000 barrels per day of crude to RIL’s 1.36 million barrels per day Jamnagar refining complex as part of the arrangement.
O2C Spin-off
RIL plans to approach the regulatory body National Company Law Tribunal (NCLT) with its proposal to spin off its oil-to-chemicals (O2C) business into a separate subsidiary to facilitate the Aramco partnership opportunity, Ambani said.
“We expect to complete this process by early 2021,” he said.
RIL, which is a major petrochemical producer in India, had also been approached by other international companies for strategic partnerships in its O2C businesses, Ambani said.
“These potential partnerships will help us build competitive manufacturing capacity at our existing sites to serve the deficit Indian market that still depends on large-scale imports of chemicals,” he added.