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Saudi Oil Giant Aramco in talks to acquire 25% stake in Reliance Industries refining & petrochemical business

Saudi Oil Giant Aramco in talks to acquire 25% stake in Reliance Industries refining & petrochemical business

Saudi Oil Giant and world’s largest oil exporter Aramco is in negotiations to buy stake in Reliance Industries’ oil refineries and petrochemical complex.

Aramco begin the first round of talks with Reliance as a USD 44-billion mega refinery-cum-petrochemical complex, where it was taking a 50 per cent stake along with UAE’s ADNOC, got delayed, but later on BJP-government terminated plans for acquiring land for the project in coastal parts of Maharashtra.

As per market experts and industry sources said talks have been in process for a couple of months but there is nothing concrete that has been finalized as yet.

Reports suggested, Aramco may take 25 per cent stake for USD 10-15 billion, but sources discounted such a valuation, saying market capitalization of Reliance at Tuesday’s closing price on Bombay Stock Exchange was around Rs 8.5 lakh crore, at least half of which or Rs 4.25 lakh crore (about USD 60 billion) would be coming from refinery and petrochemical business.

A 25 per cent stake would translate into USD 15 billion without even considering any premium of giving a firm foothold into a well-established business in the world’s third largest energy consuming nation, they said.

Reliance Industries company officials has are sitting quiet and declined to comment on the issue. “As a policy, we do not comment on media speculation and rumors. Our company evaluates various opportunities on an ongoing basis,” a company spokesperson said.

“We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, and our agreements with the stock exchanges,” he added.

Saudi Oil Major Aramco has on various occasions in the past, disclosed its discussions with Reliance. The last such comment was on February 20,2019 when its CEO, Amin Al-Nasser visited here as part of a high-level delegation, along with Saudi Crown Prince Mohammed bin Salman.

Initially all the negotiations with Reliance Industries first came to light in December, 2018 when Saudi Oil Minister Khalid al-Falih visited Reliance Chairman and Managing Director Mukesh Ambani.

Currently Reliance operates two mega refineries at Jamnagar with a total capacity production of 68.2 million tonnes per annum.

Saudi Arabia, on the other hand, is keen to get a foothold in the world’s fastest-growing fuel market, to get a captive customer for the crude oil it produces.

Saudi Aramco is also keen on retailing fuel in India. A refinery in India can also be a base for it to export fuel to deficit countries in Europe and other parts of America.

India has a refining capacity of 247.6 million tonnes, which exceeded the demand of 206.2 million tonnes.

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