India Reliance is preparing to sell 20% of its refining business to Saudi Aramco

Tuesday, August 13, 2019
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14868]

Mumbai: "Middle East"

Reliance Industries is in the process of selling Saudi Aramco a 20% share of its oil-to-chemicals business, which will help the Indian giant reduce debt and give Aramco better access to a fast-growing market .
BMS Prasad, chief executive of Reliance Industries, said Monday that the terms of the deal have not been finalized yet, but that Reliance still needs to receive about $ 15 billion, including debt. Both companies intend to conclude the agreement by March 2020, he said.
The deal will allow Reliance to buy up to 500,000 barrels of crude oil a day from Aramco, Prasad told the media after the company's annual general meeting. Currently.
A Saudi Aramco official said yesterday that the company had signed a letter of intent with Reliance Industries, an Indian company, to acquire a stake in its refining and petrochemicals business, but the talks were "at a very early stage".
"These are the very first steps in the transaction that will allow us to conduct a thorough examination of ignorance," said Khalid al-Dabbagh, senior vice president of finance, at the press conference after publication of first half results.
This agreement is part of Aramco's desire to expand its global presence in refining and marketing by signing new agreements and increasing the capacity of its refineries to secure new markets for its oil. gross. Aramco is ramping up its refining and petrochemicals business, particularly in Asia, and sees chemical growth at the heart of its downstream expansion strategy to reduce the risks badociated with slowing demand for oil.
"This shows the perfect synergy between the world's largest oil producer and the world's largest integrated refinery and petrochemical complex," said Reliance President Mukesh Ambani at the statement made during the meeting. Annual General Meeting of Mumbai.
Ambani, the richest man in Asia, said that this deal would constitute the largest foreign investment in the history of Reliance, as well as one of the largest foreign investments ever made in India.
Last month, Saudi Energy Minister Khalid al-Falih told Reuters that he was "optimistic" about reaching an agreement between the two companies.
The joint venture with Aramco will include all badets of Reliance Refining and Petrochemicals, as well as its 51% stake in a joint venture selling oil.
Also last week, BP, the world's largest oil company, announced the creation of a joint venture with Reliance for retail fuel, in order to meet the growing demand of the third largest fuel economy. ;Asia. Reliance is preparing to hold 51% of the project.
Gagan Dixit, an badyst at Elara Capital, told Reuters that the deal would help Reliance acquire the technology to convert more fuel into chemicals as part of a process led by Saudi Aramco.
Aramco will also be able to supply non-Saudi oil as part of the deal, a source close to the case said.
The deal with Aramco is expected to allow Reliance to acquire new ways to acquire oil and better protect against supply disruptions due to geopolitical tensions. Reliance has already purchased significant quantities of crude oil from Venezuela and Iran, and both countries face US sanctions.
The Aramco Agreement is the latest in a series of measures taken by Reliance to divest non-core badets or establish joint ventures to reduce its debt by $ 2,882.43 billion ($ 41.8 billion). ) June 30th.
Prior to the deal with BP, Reliance announced last month the sale of its tower badets, via an investment fund, to Canadian management Brookfield for Rs 250 billion. This month, sources said to Reuters that Reliance was in talks with the e-commerce giant Amazon.com in order to divest a stake in its retail business. "The agreement with Aramco, combined with Reliance's profits from refining and petrochemicals, will help the company reduce its net debt to zero in two years," said Dixit.
Ambani has set a more ambitious timetable, claiming yesterday that his company had a very clear timetable to become a debt-free company in the next 18 months.

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