Saudi Aramco to acquire 20% stake in RIL's oil-to-chemical business
Saudi Aramco and Reliance Industries (RIL) have agreed to a non-binding letter of intent (LoI) regarding a proposed investment in the oil-to-chemicals (O2C) division comprising the refining, petrochemicals and fuels marketing businesses of RIL. Saudi Aramco’s potential 20% stake is based upon an enterprise value of $75bn for the O2C division. This would be one of the largest foreign investments ever made in India.
Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years. Saudi Aramco is the world’s largest and lowest cost-per-barrel producer of crude oil, is geographically close to India, and offers a wide range of crude supply options.
RIL’s Jamnagar refinery is the largest and most complex refinery in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities. The proposed investment would result in Saudi Aramco supplying 500KBPD of Arabian crude oil to the Jamnagar refinery on a long-term basis.
Under the non-binding LoI, the proposed investment is subject to due diligence, and the executed definitive agreement will be subject to regulatory and other customary approvals. The parties will make an announcement once a definitive agreement is executed.
/Source: Refining&Petrochemicals/
Aug. 15, 2019