Saudi Aramco is set to take a 20 per cent stake in Reliance Industries’ refining and petrochemical businesses.
The terms of the deal are yet to be finalised, but company officials said Reliance will get roughly $15 billion, including some debt adjustments, for the 20 per cent stake when the sale closes later this year.
The deal also includes a long-term agreement for Saudi Aramco to supply the joint venture assets with 500,000 barrels per day of crude oil.
Alan Gelder, Vice President for Refining and Chemicals at Wood Mackenzie, said: “Our analysis indicates that the total earnings from the combined refinery sites in India are the highest in Asia outside the mega-refiners of Sinopec and PetroChina.”
“Crude supplies of 500,000 barrels per day represents about 40 per cent of Reliance’s crude intake, significantly higher than the stale taken, although Saudi Aramco historically supplied 20 per cent of Reliance’s crude oil requirements.”
“The deal is further evidence that Saudi Aramco is executing on its long-term strategy to increase its refining and petrochemical capacity.”
“This strategy is being achieved through a combination of project and acquisitions, with this acquisition following on from last year’s acquisition of SABIC and SASREF, and the memorandum of understanding Aramco signed this year to acquire a nine per cent stake in Zhejiang Petrochemical’s 800,000 barrel per day integrated refinery and petrochemical complex in Zhoushan, China.”
“Saudi Aramco continues to show keen interest in accessing the Indian market, which has the strongest long-term growth prospects.”
“Aramco is also demonstrating discipline in targeting strongly competitive assets that are well placed, through petrochemical integration, to be sustainable through the energy transition.”