Saudi Arabian oil giant Saudi Aramco and Reliance, India’s largest petrochemical firm, have mutually agreed to reevaluate a $15 billion deal for Aramco to purchase a 20 percent stake in Reliance’s oil-to-chemical business.
The sale had been announced in 2019, but progress has been slow. Oil prices crashed last year due to a huge demand upset caused by the COVID-19 pandemic, delaying the deal.
“Due to evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context. Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn,” Reliance said in a statement on Friday.
Reliance also noted that the decision had been taken despite teams at Aramco and Reliance making “significant efforts in the process of due diligence, despite COVID restrictions.”
Reliance renewable focus
The petrochemical firm earlier this year announced a 600 billion rupee ($8 billion) plan to invest in renewable energy through the development of the Dhirubhai Ambani Green Energy Giga Complex at Jamnagar in western part of the state of Gujarat.
The new facility will be at the centre of Reliance’s renewable energy business and its commitment to net zero. Jamnagar represents a major part of the company’s oil-to-chemical assets.
As part of the complex, Reliance will be building four “giga factories,” which will include an integrated solar photovoltaic module factory, and energy storage battery factor, an electrolyser factory for producing green hydrogen, and a fuel cell factory for converting hydrogen into power.
“The deep engagement over the last two years has given both Reliance and Saudi Aramco a greater understanding of each other, providing a platform for broader areas of cooperation. Saudi Aramco and Reliance are deeply committed to creating a win-win partnership and will make future disclosures as appropriate,” Reliance added.
