Reliance’s Ambani says working to complete Saudi Aramco deal

Mukesh Ambani. Photographer: Simon Dawson/Bloomberg

Having already raised ₹1.15 lakh crore from global tech investors, including Facebook to make the company net debt-free, Reliance Industries chairman Mukesh Ambani said they are now working to complete contours of a $15-billion deal with Saudi Aramco. Announced in the oil-to-telecom conglomerate’s last year annual general meeting (AGM), the deal was to be concluded by March 2020 but has been delayed.

Reliance has not yet given a fresh timeline for the completion of the deal.

“In the energy businesses, Reliance is working to complete the contours of a defining strategic partnership with Saudi Aramco (Aramco). Reliance and Aramco share a common outlook and vision on the evolution of the business in the future with emphasis on higher oil-to-chemicals conversion,” Mukesh Ambani said in a letter to shareholders in RIL’s annual report.

He said the partnership gives the refineries access to a wide portfolio of value accretive crude grades and enhanced feedstock security.

Reliance intends to sell 20% stake in the oil-to-chemical (O2C) business, which comprises its twin oil refineries at Jamnagar in Gujarat and petrochemical assets, to Aramco, the world’s largest oil exporter.

With a stake, Aramco would not just have a stake in one of the world’s best refineries and the largest integrated petrochemical complex but also access to one of the fastest-growing markets — a ready-made market for 5 lakh barrels per day of its Arabian crude and offering a potentially bigger downstream role in future.

Besides refineries and petrochemical plants, the O2C business also comprises 51 per cent stake in the fuel retailing business. It, however, does not include the upstream oil- and gas-producing assets such as the flagging KG-D6 block in the Bay of Bengal.

RIL’s refineries are one of the most complex in the world, allowing it to earn a significant premium to the benchmark Singapore gross refining margin. Its petrochemical complexes rank among the biggest in the world, whose dependency on outside raw materials is minimal. RIL has leadership positions both in the domestic polymer and polyester markets.

In a report, HSBC Global Research had said the Aramco deal could provide significant financial muscle to RIL as it carves out space for itself in highly competitive omni-channel retail.

(Inputs from agencies)

This article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.