InvestorQ : What is the latest in the Aramco proposed O2C deal with Reliance Industries?
Rutuja Nigam made post

What is the latest in the Aramco proposed O2C deal with Reliance Industries?

Answer
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2 months ago


After playing their cards close to their chest, the formidable Saudi Aramco group appears to be all set to revive the deal with Reliance Industries on a top priority basis. Many of these plans are driven by the big plans that Aramco has in mind in view of falling crude prices.

Now it looks like Aramco is going to go all out to woo Reliance and get the two parties back to the negotiation table. This pertained to the earlier plan to sell a 20% stake in Reliance’s O2C or oil to chemicals sale, which has been in cold storage for some time.

In 2019, Aramco had agreed to take a significant stake of 20% in the O2C business of RIL at $15 billion. This would have valued the overall O2C business at $75 billion. However, it did not materialize because oil prices crashed during this period and Aramco wanted to renegotiate.

A lot of things changed since then and Aramco also recognizes that now it makes a lot more sense for them to push the deal through. RIL has already managed to monetize Jio Platforms to raise enough funds towards its zero-debt plans, not counting the rights issue.

This has put Aramco on the defensive as it sees its value falling in the oil crisis. Now, Aramco is even willing to put its independent refinery plans in India on hold and prioritize the closing out of the deal with Reliance for O2C business. Things could move fast from here on.