InvestorQ : What is the significance of Reliance hiving off its oil to chemicals or O2C business?
Moii Chavate made post

What is the significance of Reliance hiving off its oil to chemicals or O2C business?

Answer
user profile image
Tisha Malhotra answered.
3 weeks ago


Reliance, as per the plan outlined in the last AGM, spun off its oil-to-chemical or O2C business unit to a separate subsidiary company, Reliance O2C Ltd. This new company will hold the oil refining and petchem assets plus the minority interest in retail fuel business.

However, Reliance O2C will exclude the upstream oil and gas producing fields such as KG-D6 and other such fields as well as the textiles business. This could be the first step for the group to eventually sell a stake in the business to Saudi Aramco as planned earlier.

Apart from the refining and petchem businesses of the group, Reliance O2C will also house the bulk and wholesale fuel marketing as well as the 51% stake in the retail fuel JV with BP. All the assets and liabilities attributable to these business will also be transferred.

The Reliance O2C business will have some specific exclusion clauses. It will exclude large ethane carriers, gas pipelines for CBM blocks, overseas oil and gas asset, domestic exploration assets, textiles, Baroda township land and stadium, Jamnagar Power assets, Sikka Ports etc.

Under the original plan, RIL was to sell 20% in the O2C business to Aramco for $15 billion valuing the overall O2C business at $75 billion. RIL is also exploring to bring in other strategic investors in the O2C business.