Saudi Aramco and Reliance Industries Limited (RIL) have signed a non-binding Letter of Intent (LOI) regarding a proposed investment in the Oil to Chemicals (O2C) division comprising the refining, petrochemicals and fuels marketing businesses of RIL. Saudi Aramco’s potential 20 % stake is based upon an enterprise value of USD 75 billion for the O2C division. According to RIL, this would be one of the largest foreign investments ever made in India.
Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years. Saudi Aramco is one of the world’s largest producers of crude oil, is geographically close to India, and offers a wide range of crude supply options. To date it has supplied approximately 2 billion barrels of crude oil for processing at RIL’s refinery at Jamnagar, India. RIL said its Jamnagar refinery is one of largest refineries in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities. The proposed investment would result in Saudi Aramco supplying 500 KBPD of Arabian crude oil to the Jamnagar refinery on a long term basis.
Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited, said “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our Oil to Chemicals division. We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment. Saudi Aramco’s interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India.”
Under the non-binding LOI, the proposed investment is subject to due diligence, and the executed definitive agreement will be subject to regulatory and other customary approvals. The parties said that they will make an announcement once a definitive agreement is executed.