Saudi Aramco signed a letter of intent to take a 20% stake in Reliance’s oil-to-chemicals business, in a deal likely to close by March 2020. While terms of the deal are yet to be finalised, Reliance will get roughly US$15 bln, including some debt adjustments for the 20% stake. The deal with Aramco will cover all of Reliance’s refining and petrochemical assets, along with its majority stake in its petroleum retail joint venture. The deal will see Reliance buy up to 500,000 barrels a day of crude oil from Aramco, which would more than double the volumes that Reliance currently buys.
Aramco is expanding its downstream, or refining, chemicals and marketing, footprint globally by signing new deals and boosting the capacity of its plants to secure new markets for its crude and reduce its risk to any downturn in oil demand. For years, Aramco has been a regular crude supplier to Indian refiners via long-term crude contracts.