Reliance to Sell 20% Stake in Oil-to-Chemicals Arm to Saudi Aramco

The deal will see Reliance buy up to 500,000 barrels a day of crude oil from Aramco.

OILMONSTER.COM- India’s Reliance Industries is set to sell a 20% stake in its oil to chemicals business to Saudi Aramco, helping the Indian conglomerate to cut debt and giving Aramco better access to a fast growing market.

While terms of the deal are yet to be finalised, Reliance will get roughly $15 billion, including some debt adjustments for the 20% stake, P.M.S. Prasad, Executive Director of Reliance Industries said on Monday, adding the two companies aim to close the deal by March 2020.

The deal will see Reliance buy up to 500,000 barrels a day of crude oil from Aramco, Prasad told media after the company’s annual general meeting (AGM), noting this would more than double the volumes that Reliance currently purchases from Aramco.

The deal ties in with Aramco’s push to expand its refining and marketing footprint globally by signing new deals and boosting the capacity of its plants to secure new markets for its crude oil.

Aramco is boosting its refining and petrochemicals business, particularly in Asia, and sees growth in chemicals as central to its downstream expansion strategy to reduce risk as oil demand slows.

“This signifies perfect synergy between the world’s largest oil producer and the world’s largest integrated refinery and petrochemicals complex,” said Reliance Chairman Mukesh Ambani, while announcing the deal at the AGM in Mumbai on Monday.

Ambani, who is Asia’s richest man, said the deal would be the biggest foreign investment in the history of Reliance and also one of the largest foreign investments ever in India.

Aramco declined to comment on the Reliance tie-up on Monday which coincided with its announcement of a 12% decline in half-year net profit.

Courtesy: www.reuters.com