Saudi Aramco to buy 20% stake in Reliance’s Oil to Chemicals division

Saudi Aramco’s deal with RIL is at an enterprise value of $75 billion.
Saudi Aramco to buy 20% stake in Reliance’s Oil to Chemicals division
Saudi Aramco to buy 20% stake in Reliance’s Oil to Chemicals division

Mukesh Ambani-led Reliance Industries has announced that it has formed a long-term partnership with Saudi Aramco, a Saudi Arabian Oil Company in its oils to chemicals division.

Saudi Aramco will invest in Reliance for a 20% stake in Oil to Chemicals division at an Enterprise Value of $75 billion. This investment by Saudi Aramco is subject to due diligence, definitive agreements, regulatory and other customary approvals.

This announcement was made at RIL’s 42nd Annual General Meeting (AGM) in Mumbai on Monday. According to Ambani, this is the biggest foreign investment in the history of Reliance and is among the largest foreign investments in India.

The partnership will cover all of RIL's Refining and Petrochemicals assets, including 51% of the Petroleum Retail JV. Saudi Aramco will also supply 500 KBPD of Crude Oils on a long term basis to RIL's Jamnagar refinery.

“This signifies perfect synergy between the world's largest oil producer and the world's largest integrated refinery and petrochemicals complex. Since its inception, our Jamnagar refinery has been processing Saudi oil every single day for 20 years. Now we have transformed our longstanding relationship of two decades, based on mutual trust, into a Partnership of growth potential for many more years. I feel privileged to welcome Saudi Aramco, which is the largest business enterprise in the world,” Ambani said while speaking at the AGM.

Speaking of the Oils to Chemicals business, Ambani announced that the company achieved revenue of ` Rs 5.7 lakh crore, exports of Rs 2.2 lakh crore and EBITDA of Rs 52,041 crore.

The company has processed 68.3 million tons of crude during the year and achieved a GRM of $9.2 per barrel, maintaining a margin of $4.2 per barrel over the Singapore complex.

Reliance also recently announce a joint venture with BP in the petroleum retailing business, where BP is acquiring 49% stake in RIL’s petro-retail business. Reliance will get Rs 7,000 crore from BP for this transaction.

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