Riyadh: Saudi Aramco has revealed that it is still working on a deal to buy a $15 billion stake in Reliance Industries Ltd.’s refining and chemicals business. However, lower oil prices force it to slash other investments.
With the deal with India’s Reliance, world’s biggest crude exporter would join the ranks of the top oil refiners and chemical makers. State-owned Aramco is already a major supplier of crude to India. It bought chemical firm Saudi Basic Industries Corp. for $70 billion this year. On the other side, Reliance sells petroleum products such as gasoline to Saudi Arabia.
Aramco Chief Executive Officer Amin Nasser told media persons that the company is still in discussion with Reliance. He is quoted to have said, “The work is still on. We will update our shareholders in due course.”
Deven Choksey, managing director at KR Choksey Investment Managers Pvt. in Mumbai informed that a deal could be finalized around the first quarter of next year.
Mukesh Ambani, the chairman, managing director, and largest shareholder of Reliance Industries Ltd. had also hinted last year that Aramco was set to buy a 20% stake in his company’s refining and petrochemicals business, valuing it at $75 billion. He is the world’s fourth-richest person.
The deal would help Aramco reach its goal of more than doubling refining capacity to between 8 million and 10 million barrels a day. It had capacity of 3.6 million barrels a day at the end of last year. The Saudi company has a gross capacity of 6.4 million barrels daily in the facilities in which it has stakes.
Saudi Aramco is officially known as Saudi Arabian Oil Co. It is working to start the 400,000 barrel-a-day Jazan refinery on Saudi Arabia’s southern Red Sea coast this year. Besides owning the biggest refinery in the U.S., the company also has its plants in countries such as South Korea and Japan. It is planning several ventures in China as well.
While Reliance’s stock fell 1.3% in Mumbai on Monday, Aramco rose 0.2% to 33.10 riyals in Riyadh.