Saudi Arabia's Aramco in talks to buy stake in refining business of India's Reliance

Published April 17, 2019
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia. — Reuters/File
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia. — Reuters/File

State oil giant Saudi Aramco, the world's biggest oil producer, is in talks to buy a minority stake in the refining and petrochemicals businesses of India's Reliance Industries Ltd, sources familiar with the matter said on Wednesday.

The Times of India reported earlier that Aramco was in talks to buy a stake of up to 25 per cent, which could be worth around $10-15 billion, valuing the Indian company's refining and petrochemicals businesses at some $55-60bn.

Aramco's discussions with Reliance were “serious”, one source said. Another source said talks with Reliance were so far for a 25pc stake.

Aramco and Reliance declined to comment.

Reliance, controlled by Asia's richest man, Mukesh Ambani, is India's biggest refining and petrochemicals company and runs a 1.4 million barrels per day refining complex at Jamnagar in western India. It plans to expand capacity to 2m bpd by 2030, according to plans shared with the Indian government.

Aramco is expanding its refining and petrochemical business globally by signing new deals and boosting the capacity of its existing plants.

Last year, Aramco and the United Arab Emirates' (UAE) national oil company, ADNOC, teamed up with state-run Indian refiners in a plan to build a 1.2m bpd refinery and petrochemical project in Maharashtra state.

However, the planned refinery faces delays, as thousands of farmers have refused to surrender land for it and the Maharashtra government is looking to move the plant's location.

Saudi Crown Prince Mohammed bin Salman visited India in February and said then that he expected investment opportunities worth more than $100b there over the next two years.

Ambani has travelled to Saudi Arabia at least twice since December, discussing joint investment among other issues with Aramco's chief executive, Amin Nasser.

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