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Saudi Aramco in USD 15bn Reliance O2C deal
Posted on Monday, 12 August 2019 09:43
Saudi Aramco is acquiring 20.0 per cent of Reliance Industries’ oil-to-chemicals (O2C) division in a USD 15.00 billion deal that Zephyr, the M&A database published by Bureau van Dijk, shows is one of the largest foreign investments ever made in India. The national petroleum and natural gas company has already supplied about 2.00 billion barrels of crude oil for processing at the Mumbai-based conglomerate’s Jamnagar refinery as per a long-standing 25-year supply agreement. Reliance’s facility is the largest and most complex in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities. The proposed investment, which is based upon an enterprise value of USD 75.00 billion for the O2C division, would result in Saudi Aramco supplying 500,000 barrels per day of crude oil on a long-term basis. However, it is still a non-binding letter of intent, is subject to due diligence and will need regulatory and other customary approvals if it advances to a definitive agreement. Saudi Aramco has made a couple of high-value investments in the last 12 to 18 months, Zephyr shows. The group bought 17.0 per cent of Hyundai Oilbank for USD 1.21 billion in April and completed the acquisition of the remaining 50.0 per cent in Arlanxeo Holding for USD 1.72 billion in December. In May, Saudi Aramco’s services arm entered into a 20-year liquid natural gas (LNG) sale and purchase contract with Sempra Energy. The heads of agreement comprise a 5.00 million tonnes per annum of LNG offtake from phase 1 of the Port Arthur LNG export-project under development. Saudi Aramco also entered into talks with Korea National Oil to explore the potential of crude oil storage in South Korea to complement its marketing and supply activities. The company said it in its half year report today it is continuing to leverage its upstream strength to deliver its downstream growth strategy, including acquisitions both at home and abroad. © Zephus Ltd