Saudi Aramco considers stake in RIL’s refining and petrochemical units

Saudi Aramco is reportedly holding discussions to acquire a minority stake in India’s Reliance Industries’ (RIL) refining and petrochemicals businesses.

According to Reuters, Saudi Aramco may acquire a 20% interest in the units as it plans to increase investments in the refining and petrochemicals sectors. This is aligned with the company’s earlier announced plan to invest $500bn over the next ten years.

Overall, Reliance has offered Aramco an integrated deal that includes a stake in existing refineries and the planned refinery in Jamnagar, as well as the petrochemical business, a source familiar with the matter told the news agency.

The Times of India reported that Aramco may acquire up to 25% of the businesses for $10bn-$15bn. The deal will value RIL’s refining and petrochemicals businesses between $55bn and $60bn.

Saudi Aramco and RIL declined to comment on the development. However, the Saudi Arabian company is known to have previously shown interest in entering a partnership with RIL.

Recent discussions gained pace after Saudi Crown Prince Mohammed bin Salman visited India in February when he met with RIL chairman Mukesh Ambani.

Saudi Aramco CEO Amin Nasser also indicated that the company is engaged in talks to invest in Indian firms, including RIL.

If executed, the deal is expected to enhance India’s refining capacity and increase Saudi Aramco’s crude oil supply to Reliance by more than 50%, the sources added.

India is currently the third largest crude oil consumer in the world after China and the US.

RIL is the largest refining and petrochemicals company in India. It operates a 1.4Mbpd refining complex at Jamnagar and plans to expand its capacity to 2Mbpd by 2030.