Saudi Aramco To Acquire 20% Stake Worth US$75 Billion On LOI With RIL
Saudi Aramco and Reliance Industries Limited (RIL) have agreed upon a non-binding Letter of Intent (“LOI”) which is regarding a proposed investment in the Oil to Chemicals (O2C) division comprising the Refining, Petrochemicals, and fuels marketing businesses of RIL. Based upon an Enterprise Value of US$ 75 billion for the O2C division Saudi Aramco’s potential is 20% stake. This would be one of the largest foreign investments ever made in India.
Over 25 years Saudi Aramco and RIL have a long-standing crude oil supply relationship. Saudi Aramco is the world’s largest and lowest cost-per-barrel producer of crude oil and is geographically close to India, which 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.
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In the world, RIL’s Jamnagar refinery is the largest and most complex refinery 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.
Mr. 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.”
The proposed investment is subject to due diligence, and the executed definitive agreement will be subject to regulatory and other customary approvals under the non-binding LOI. The parties will make an announcement once a definitive agreement is executed.