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Home » IANS » RIL-Aramco deal on track, due diligence by Saudi co continuing

RIL-Aramco deal on track, due diligence by Saudi co continuing

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New Delhi, April 30 (IANS) The blockbuster deal involving the world’s largest oil producer Aramco picking up a minority stake in refinery business of the country’s largest corporate house Reliance Industries Ltd (RIL) is on track with the Saudi entity continuing with its due diligence for the planned multi-billion investment.

The deal that has been in works for some time and doubts were raised on its early completion due to Covid-19 outbreak and lockdown.

“In spite of Covid-19 crisis and the lockdowns, the due diligence by Saudi Aramco for the planned investment in O2C (oil-to-chemical) business is on track as both the parties are committed and actively engaged,” RIL said in a statement given as part of its fourth quarter earnings report on Thursday.

The deal between Reliance and Aramco involves the Indian entity offering at least 20 per cent stake in a special purpose vehicle covering refining, petrochemicals and marketing.

The RIL board on Thursday also approved hiving-off its $75 billion O2C business into a separate entity. This is subject to approval of the National Company Law Tribunal (NCLT).

RIL is looking for investment to pare debt and focus on the expansion of its refining business. Besides, the investment will also give RIL assured supply of crude oil to its refineries. Aramco fits the bill as the company itself had indicated its desire to expand beyond Saudi Arabia and in particular invest in oil and gas space in India.

Though the size of the deal has not been worked out, analysts following the developments said that a stake sale upto 25 per cent in RIL refinery operations may fetch the company in excess of $15 billion.

Sources close to the development said that Reliance’s proposal to shift a portion of its group level debt to the refinery business before its stake sale to Aramco had slowed the progress on the deal. But all issues now seem to have been resolved. The deal was earlier scheduled to close by March 2020 but is now expected to be completed within the calendar year.

Apart from investments in proposed refinery operations, talks at government level have also taken place to bring Aramco in setting up its own fuel stations in the country. This is part of the strategy to improve consumer experience in the country and expose even state-run retailers to best global practices.

In addition, investment from Aramco would also be looked into specifically in the area of high temperature deep-sea off shore exploration that has been opened for FDI and also the mega refinery planned by PSUs in Maharashtra.



(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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