State-owned Saudi Aramco, based in Riyadh, Saudi Arabia, has signed a non-binding letter of intent to acquire a 20 percent stake in the Oil to Chemicals (O2C) unit of Mumbai-based Reliance, officials said in an Aug. 12 news release. The O2C unit is valued at $75 billion.
The businesses of O2C include refining, fuels marketing and petrochemicals. The petrochemicals part of the business includes major PP resin operations, as well as production of polyethylene, PVC, PE pipe, PET bottle resin, polyester staple fiber and yarn, elastomers and composites.
“We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment,” Reliance Chairman and Managing Director Mukesh Ambani said in the release. “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 deal is subject to due diligence. A definitive agreement will be subject to regulatory and other customary approvals, officials said. No timeline for completion of the deal was cited in the release.
Reliance ranks as India’s largest private sector company, with annual sales of just over $90 billion. The firm’s businesses include hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals and retail and digital services.