Aramco back in talks with India’s Reliance Industries on a deal worth up to $25 billion

Saudi Aramco is in advanced talks again to acquire about 20 per cent stake in Reliance Industries Ltd’s oil refining and chemicals business for about $20 billion to $25 billion in Aramco’s shares, according to Bloomberg News.

An agreement could be reached as early as within next two weeks, according to the report, which cited people with knowledge of the matter.

Reliance had announced a sale of a 20 per cent stake in its oil-to-chemicals business to Aramco for $15 billion in 2019, but the deal was stalled after oil prices and demand crashed last year due to the pandemic.

Energy markets have since recovered, with crude prices jumping around 35% this year to almost $70 a barrel.

In late June 2021, Reliance’s chairman Mukesh Ambani said it hoped to formalise its partnership with Aramco this year and its chairman Yasir Al-Rumayyan would join the Indian conglomerate’s board as an independent director.

During Aramco’s earnings briefing earlier in August, Chief Executive Officer Amin Nasser said the company was still doing due diligence on the deal. Though both parties refused to comment, it is expected that the deal will give a boost to Aramco’s sales of crude to India. For Reliance, it would help to lock in a steady supply of oil for its giant refineries and make the Indian company a shareholder in Aramco. Based on Aramco’s market valuation of about $1.9 trillion, a transaction would give Reliance a stake of around 1 per cent.

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