Chairman and managing director of Reliance Industries Limited, Mukesh Ambani, on Monday announced a deal with Saudi Aramco, terming it India's largest foreign direct investment till date.
Speaking at the 42nd annual general meeting in Mumbai, Ambani stated that Saudi Aramco will acquire a 20 per cent stake in RIL's oil-to-chemicals (OTC) or refining and petrochemicals business at an enterprise value of $75 billion.
“Saudi Aramco and Reliance have agreed to form a long-term Partnership in our Oil to Chemicals division… This investment by Saudi Aramco is subject to due diligence, definitive agreements, regulatory and other customary approvals,” Ambani announced on Monday.
The partnership, Ambani said, will cover all of RIL's Refining and Petrochemicals assets, including 51 per cent of the Petroleum Retail joint venture.
“Saudi Aramco will also supply 500 barrels of crude oil 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,” added the CMD.
Ambani said that since its inception, 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 am grateful to the visionary leaders, Prime Minister Narendra Modi and His Royal Highness Crown Prince Mohammad bin Salman Al Saud, who have laid the foundation for strategic cooperation between India and the Kingdom of Saudi Arabia,” said Ambani.
The deal follows RIL announcing a joint venture with BP wherein the latter will pick up 49 per cent stake in the former’s petroleum retailing business for Rs 7,000 crore.
The company eventually wants to achieve an over 70 per cent conversion of crude refined in Jamnagar to competitive chemical building blocks of olefins and aromatics. The Jamnagar refinery product slate, at the culmination of oil-to-chemical transition, shall be only jet fuels and petrochemicals.
“All refined products priced below crude shall be eliminated for chemicals at the initial stage. Final fuel de-risking shall target the elimination of gasoline, alkylate and diesel, synchronised to the global evolution of E-mobility and transport fuel demand decline,” RIL said in its annual report.
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