Saudi Aramco has signed a non-binding letter of intent (LoI) to acquire a 20% stake in the oil-to-chemicals (O2C) division of India’s Reliance Industries Limited (RIL) for $75bn.
The deal marks one of India’s largest foreign direct investments to date.
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The O2C division includes refining, fuels marketing and petrochemicals businesses of RIL, which operates two oil refineries in Jamnagar, Gujarat.
One of the refineries can produce gasoline and diesel of any grade and the other can process 580,000bpd of crude.
According to the deal, Saudi Aramco is expected to supply 500,000bpd of crude oil on a long-term basis to RIL’s Jamnagar refinery.
Aramco has so far supplied approximately two billion barrels of crude oil for processing at the Jamnagar refinery.
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By GlobalDataReliance Industries managing director and chairman Mukesh Ambani said: “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our O2C division.
“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 depend on the receipt of regulatory and other customary approvals.
A further announcement is expected to be made by the companies after the execution of a definitive agreement.
Saudi Aramco is the lowest cost-per-barrel producer of crude oil, and offers several crude supply options.
