Saudi Aramco has agreed to acquire a 20% stake in India's Reliance Industries oil to chemicals unit, which holds an enterprise value of $75bn. The oil to chemicals division comprises the refining, petrochemicals and fuel marketing businesses under Reliance.
In a press statement, Reliance noted that this deal would be one of the largest foreign investments ever made in India. This comes as Saudi Aramco seeks to expand its presence in the Asian refining market, and balance its upstream and downstream portfolios to become a better integrated energy company.
"I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil to chemicals division," said Mukesh Ambani, the chairman and managing director of Reliance. "We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment. Saudi Aramco’s interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India."
Saudi Aramco has supplied approximately two billion barrels of crude oil for processing at Reliance’s refinery at
Jamnagar, the world's largest refinery. The proposed investment would result in Saudi Aramco supplying 500,000 barrels per day of Arabian crude oil to the Jamnagar refinery on a long term basis.
Under the non-binding letter of intent, the proposed investment is subject to due diligence, and the executed definitive agreement will be subject to regulatory and other customary approvals.