Due to the current energy market situation and coronavirus pandemic, Saudi Aramco’s deal with India’s Reliance Industries (RIL) is facing further postponement.
Aramco is planning to acquire a 20% stake of RIL’s refining and petrochemical assets. RIL plans to offload a portion of its oil-to-chemical (O2C) business to decrease its overall debt. Saudi’s state-owned valued the total oil and chemical divisions of RIL at USD75 billion including debt.
In August 2019, RIL stated that the Aramco deal would be finished by end-March this year, but later it stated that it might be delayed beyond March.
However, there is no clarity if the plan would still proceed. RIL’s capital requirements were met already by 14 investors with a total investment of INR1.52 trillion (USD20 billion).
The company will seek permission to switch its O2C business into a separate subsidiary to help facilitate any partnership opportunities. The spin-off is targeted to be clinched by early 2021. The business would own the recently-established fuel retail joint venture between RIL and BP.
In the JV, namely RBML, BP owns a 49% share and paid USD1 billion to RIL. RBML plans to expand its fuel retail network to 5,500 in the upcoming five years from more than 1,400 retail sites currently and aims to increase its presence in 30 airports to 45.
