The move is the latest in a spree of Saudi Aramco refinery investments as the company plans to double its processing network to handle as much as 10 million barrels a day by 2030, locking in friendly buyers for the Kingdom’s crude.
Wednesday 14, August 2019
Reliance Chairman Mukesh Ambani said that Saudi Aramco will acquire a 20 per cent stake in the oil-to-chemicals business of India’s Reliance Industries, including the 1.24 million barrels-a-day Jamnagar refining complex on the country’s west coast, reported Bloomberg.
“Saudi Aramco and Reliance have agreed to form a long-term partnership in our oils to chemicals division, this signifies the perfect synergy between the world’s largest oil producer and world’s biggest integrated refinery and petrochemicals complex,” Ambani said.
As part of the deal, Reliance will agree to a long-term purchase of 500,000 barrels of crude a day from Saudi Aramco.
Reliance values its oil-to-chemicals division at $75 billion including debt, implying a $15 billion valuation for the stake.
The deal should be completed by March and is subject to due diligence, definitive agreements and regulatory and other approvals, Ambani said. He did not say how the deal would be structured.
The Indian-based firm stated that Saudi Aramco and Reliance Industries agreed to a non-binding Letter of Intent regarding a proposed investment in the Indian company’s oil-to-chemicals division comprising the refining, petrochemicals and fuels marketing businesses.
Reliance also receive INR 70 billion ($990 million) from BP in a deal announced last week that gives the European oil major a 49 per cent stake in the Indian conglomerate’s fuel retail business.
The companies last week said they’d agreed to form a new joint venture that will take over 1,400 retail fuel stations run by Reliance along with its aviation fuels operations at more than 30 airports across India.
Saudi Aramco is planning an initial public offering in 2020 or 2021.