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Saudi Aramco to acquire 20% stake in India-based Reliance's O2C arm

Saudi Aramco will supply 500,000 barrels per day of Arabian crude oil to Reliance's Jamnagar refinery on a long-term basis

Saudi Aramco has supplied nearly 2 billion barrels of crude oil for processing at the Jamnagar refinery. [representational]
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Saudi Aramco has supplied nearly 2 billion barrels of crude oil for processing at the Jamnagar refinery. [representational]

The world’s largest oil producer and Saudi Arabia’s state-owned oil and gas firm, Saudi Aramco, is set to acquire a 20% stake in the oil to chemicals (O2C) division of Reliance Industries Limited (RIL) – listed on the Bombay Stock Exchange and owned by billionaire Mukesh Ambani, with an enterprise value of $75bn (SAR281.3bn).

In a stock market missive, the Mumbai-headquartered RIL stated that both the companies have inked a non-binding Letter of Intent (LOI) for the proposed investment which covers Reliance’s refining, petrochemicals, and fuels marketing businesses.

The company said that the potential deal will be one of the largest foreign investments ever made in India.

Saudi Aramco has, until date, supplied approximately two billion barrels of crude oil for processing at RIL’s refinery at Jamnagar, which is the largest and most complex refinery in the world. The facility has been carrying out deep integration of refining and petrochemical activities across multiple manufacturing facilities.

The deal will result in Saudi Aramco supplying 500,000 barrels per day of Arabian crude oil to RIL’s Jamnagar refinery on a long-term basis.

Speaking about the proposed acquisition deal, chairman and managing director of RIL, Mukesh Ambani, 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."

Ambani said that the company has a long-standing crude oil relationship with Saudi Aramco and that the investment would further strengthen this relationship.

He added: “Saudi Aramco’s interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India.”

The company said that the definitive agreement will be subject to regulatory and other customary approvals.

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