Current Affairs PDF

Saudi’s ARAMCO will buy 20% of RIL’s oil and chemical business for $15 bn

AffairsCloud YouTube Channel - Click Here

AffairsCloud APP Click Here

On August 12,2019, In the 42nd Annual General Meeting (AGM) of Reliance Industries Ltd(RIL), its Chairman &MD(managing director) Mukesh Ambani stated that Saudi Arabia’s most profitable oil company Saudi Aramco will buy 20 % stake of RIL’s  oil and chemicals business for about $15 billion (approximately Rs 1.06 lakh crore), which will be one of the biggest FDI(foreign direct investment) deal in the country.
The flagship deal is registered an enterprise value of $75 billion (around Rs 5,32,466 crore). The deal is subject to regulatory approvals.Saudi's ARAMCO will buy 20% of RIL's oilKey points:
i. 1st deal with BP: The deal with Aramco follows RIL announcing a joint venture with oil and gas company BP plc(London, United Kingdom), wherein BP will pay Rs 7,000 cr for 49% stake in RIL’s petroleum retailing business.

  • RIL’s current 1,400-odd petrol pumps and 31 aviation fuel stations, will be shifted to the new joint venture where BP will hold a 49 % stake. The remaining 51% will be used by RIL to expand the retail network to 5,500 petrol pumps in the next 5 years.
  • This is the 3rd joint venture between Reliance and BP since the year 2011. (In the 1st one BP had bought 30 % stake in 21 oil & gas exploration and production blocks of Reliance in 2011 for $ 7.2 billion & in the 2nd 50:50 joint venture was signed to set up India Gas Solutions for sourcing and marketing gas in India).

ii. 2nd deal with Aramco:  As part of the deal, Aramco will supply 700,000 barrels per day on a long-term basis of crude oil to Reliance’s twin refineries(Reliance & petrochemical complex) at Jamnagar in Gujarat, which has the total capacity of 68.2 million tonnes per annum.
RIL wants to achieve an over 70% conversion of crude refined in Gujarat to competitive chemical building blocks of olefins and aromatics& it also plans to expand its only-for-exports special economic zone (SEZ) refining capacity to just over 41 million tonnes from current 35.2 million tonnes.
iii. The twin deals (BP& Aramco)will help cut some of the debt of  RIL by March 2021.
About RIL:
♦ Founded: 8 May 1973
♦ Founder: Dhirubhai Ambani
♦ Headquarters: Mumbai, Maharashtra
About Saudi Aramco:
♦ Headquarters: Dhahran, Saudi Arabia
♦ President & CEO: Amin H. Al-Nasser
About BP Plc:
♦ Founded: 14 April 1909
♦ Headquarters: London, United Kingdom
♦ Chairman: Helge Lund