Saudi Aramco gets closer to picking up a stake in Reliance O2C


Last Updated: Dec 10, 2022 - 03:00 am 56k Views
Listen icon

The proposed deal between Saudi Aramco and Reliance was first announced at the 42nd AGM of Reliance Industries in 2019. Reliance was supposed to sell 20% in its Oil-to-Chemicals (O2C) business for $15 billion. However, things changed with the onset of the COVID pandemic.

Once COVID became an international pandemic, oil prices crashed as lockdowns resulted in weak oil demand. Brent dipped as low as $15/bbl due to weak demand. At that point of time, Saudi Aramco demanded a lower valuation, which Reliance was not agreeable to.

In the last few months, crude is back at $70/bbl and the deal is once again in focus. The deal was almost a certainty when Yasir Al Rumayyan of Saudi Aramco was given a seat on the RIL board at the 44th AGM in 2021.

Check: Reliance AGM 2021

It now looks like the finer points of the deal would be closed soon. Aramco is likely to pick up a 20% stake in Reliance O2C for $20-$25 billion via a stock swap. RIL will get shares of Aramco in exchange for the stake and the final word is expected soon.

What does the deal hold for Saudi Aramco? Aramco exports 6 million bpd of crude with 10% or a little over 6 lakh bpd going to India. For Saudi Aramco, India has always been a lucrative market for crude and a tie-up with Reliance gives them a ready market.

For Reliance, this assures them a steady flow of crude for their refineries from a geographically favorable location. Considering Aramco’s current market cap of $1.9 trillion, Reliance may get 1-1.2% stake in Saudi Aramco via a stock swap. It will be a unique deal between the world’s largest oil exporter and the fastest-growing refinery in Asia.

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Weekly Outlook on Copper - 01 December 2023

Copper prices saw a modest 0.33% gain, reaching 722 on Thursday, as worries about a slowdown in Chinese manufacturing loomed large. The November's NBS Manufacturing PMI slipped to 49.4, the second consecutive monthly decline, heightened concerns, emphasizing the need for additional government support to fortify China's economic growth. The NBS Non-Manufacturing PMI at 50.2, reflecting the 11th month of service sector expansion, hinted at a softer pace.

Swing Trading Stocks: Week of 04 December 2023

Swing Trading Stocks for the Week

Weekly Market Outlook for 04 December to 08 December

Our markets started the truncated week on a positive note and it rallied higher throughout the week. The first day of the December month infact witnessed a new record as the Nifty surpassed its previous high and ended in uncharted territory above 20250 with weekly gains of almost two and a half percent.