In a major effort to deepen India’s energy relationship with oil producers in the Gulf, the country’s biggest conglomerate, Reliance Industries Limited (RIL), is to sell 20 percent of the ownership of its refining and petrochemical business to Saudi Aramco for $15 billion.
This was announced by RIL Chairman Mukesh Ambani at the company’s annual shareholders’ meeting in Mumbai. Under the deal, Reliance will buy about 500,000 barrels of crude oil a day from Saudi Aramco to be refined at RIL’s giant refinery in Jamnagar in India’s west coast.
At present, RIL buys about 250,000 barrels of Saudi crude per day for its refinery in Jamnagar. The Saudi oil major’s stake in RIL will enable it to gain a toehold in the domestic fuel marketing business in India which is being liberalized by the Narendra Modi government as part of its economic reforms as reported by the Emirates News Agency, WAM, on August 8.
"This signifies perfect synergy between the world’s largest oil producer and the world’s largest integrated refinery and petrochemicals complex," Mukesh Ambani told the shareholders’ meeting.
When the deal is completed in about six months subject to regulatory approvals by the Indian government, it will be one of the biggest foreign investments in India.
The new arrangement will compensate for the stoppages of RIL’s purchases of Iranian and Venezuelan crude following US sanctions on both countries.