Saudi Aramco chairman and head of the Kingdom’s cash-rich wealth fund PIF Yasir Othman Al-Rumayyan will join the board of Reliance Industries Ltd as a precursor to a USD 15 billion deal that is now expected to conclude this year.
“Despite several challenges due to COVID-19, we have made substantial progress in the past in our discussions (with Saudi Aramco),” he said. “I expect our partnership to be formalised in an expeditious manner during this year.”
RIL chairman and Asia’s richest man Mukesh Ambani told shareholders that a deal to sell a 20 per cent stake in the company’s oil-to-chemical unit to Saudi Aramco was expected to conclude this year.
Over the past years, the oil-to-telecom conglomerate has segregated businesses into separate verticals – Jio Platforms houses the company’s digital and telecom unit, retail is a separate unit, and oil refining and petrochemical segments have been carved into the O2C vertical to attract strategic partnerships.
Ambani said RIL is looking forward to “welcoming Saudi Aramco as a strategic partner in our O2C business”. He, however, announced the appointment of Al-Rumayyan, Chairman of Saudi Aramco and the Governor of the Public Investment Fund (PIF), as an independent director on the RIL board.
“I am sure that we will immensely benefit from his rich experience of running one of the world’s largest companies, and also one of the largest sovereign wealth funds in the world,” Ambani said. “His joining our board is also the beginning of the internationalisation of Reliance. You will hear more about our international plans in the times to come.”
With a stake, Aramco would not just have a share in one of the world’s best refineries and the largest integrated petrochemical complex, but also access to one of the fastest-growing markets — a ready-made market for 5 lakh barrels per day of its Arabian crude and a potentially bigger downstream role in future.
While COVID-19 delayed the deal, talks have revived this year and the two are reportedly discussing a cash and share deal – Aramco paying for the stake with its shares initially and then staggered cash payments over several years.
Besides refineries and petrochemical plants, the O2C business also comprises a 51 per cent stake in the fuel retailing business. It, however, does not include the upstream oil and gas producing assets such as the flagging KG-D6 block in the Bay of Bengal.
