India: Oil-to-Chemicals Business Reliance Calls Off 15 Billion Dollar Saudi Aramco Deal, Will Re-Evaluate Stake Sale in O2C Business
Reliance Industries Ltd (RIL) and Saudi Aramco have mutually called off the 15-billion-dollar deal under which Saudi Aramco would acquire a 20% stake in the company’s oil-chemicals (O2C) business. The move has been undertaken in the background of RIL’s evolving nature of the business i.e. the company unveiled plans for its new energy & materials businesses under which the firm intends to develop the Dhirubhai Ambani Green Energy Giga Complex at Jamnagar, Gujarat, India, which is a major part of the its oil-to-chemicals (O2C) assets. Now, RIL and Saudi Aramco will re-evaluate the proposed investment in the O2C business.
Mumbai/India – The 15-billion-dollar oil-to-chemicals deal was recently scrapped mutually by RIL and Saudi Aramco in the background of Reliance’s evolving nature of the business. The two companies had entered into a non-binding Letter of Intent in August 2019 to acquire a potential 20% stake in RIL’s O2C business.
However, in June this year, RIL unveiled its plans to invest 10 billion dollars for its New Energy & Materials businesses over a period of three years under which it will build solar manufacturing units, a battery factory for energy storage, a fuel cell-making factory and an electrolyzer unit to produce green hydrogen.
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As part of the new business, it also announced the development of Dhirubhai Ambani Green Energy Giga Complex at Jamnagar which will be amongst the largest integrated renewable energy manufacturing facilities in the world. The Four Giga Factories which will be part of the complex will include: an integrated solar photovoltaic module factory for production of solar energy, an advanced energy storage battery factory for storage of intermittent energy, an electrolyzer factory for production of green hydrogen and a fuel cell factory for converting hydrogen into motive & stationary power Jamnagar.
Jamnagar, which accounts for a major part of the O2C assets, is envisaged to be the centre for RIL’s new businesses of Renewable Energy & New Materials. Hence, both the firms have decided to re-evaluate the proposed investment in the O2C business in light of the changed context.
RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco & Sabic for investments in Saudi Arabia.