2019-08-13 13:30:00
SAUDIS INVESTMENT FOR INDIA $100 BLN
PLATTS - Saudi Aramco will acquire a 20% stake in Reliance Industries' oil-to-chemical business, expanding Saudi Arabia's burgeoning footprint in India's fast-growing refining sector.
The deal, announced by Reliance Chairman Mukesh Ambani at an investors meeting Monday, will see the Saudi state-owned oil giant pay an implied $15 billion for the 20% stake of the oil-to-chemicals division, which Reliance values at $75 billion.
The transaction, which is subject to due diligence, definitive agreements and regulatory approvals, will also see Aramco supply 500,000 b/d of crude on a long-term basis to Reliance's Jamnagar refinery complex.
"This signifies perfect synergy between the world's largest oil producer and the world's largest integrated refinery and petrochemicals complex," Ambani said, calling the acquisition among the largest foreign investments in India.
Saudi Arabia is India's top crude supplier, shipping about 800,000 b/d to the country.
INDIA TOP PRIORITY
Aramco, which is due to hold its first ever earnings call later Monday, has been eying several opportunities in India, with Saudi oil minister Khalid al-Falih saying in February during Crown Prince Mohammed bin Salman's state visit to New Delhi that the country was the kingdom's "No. 1 priority for investment."
Officials unveiled plans to invest $100 billion in India, with the bulk of the funds going toward the infrastructure and energy sectors.
Aramco has already signed an initial agreement to take a stake in the planned Ratnagiri refinery and petrochemicals complex on the western coast with a capacity of 60 million mt/year. The project is being jointly built by state-run refiners Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp.
The India projects are part of Aramco's overall strategy of doubling its global refining capacity to some 10 million b/d by 2030, primarily in the growth economies of Asia, to lock in supply outlets for its crude.
Aramco, which is aiming to publicly list shares in 2020 or 2021, pumps about 10 million b/d and says it has the capacity to produce up to 12.5 million b/d.
Ahead of its earnings call, the Saudi national oil company announced net income for the first half of 2019 of $46.9 billion, down from $53.2 billion for the same period last year, as it suffered from lower oil prices.
The year-on-year slump aside, Aramco remains the world's most profitable company by far.
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Earlier:
2019, August, 12, 12:50:00
ARAMCO NET INCOME $46.9 BLN
Brent crude futures were at $57.80 a barrel by 0854 GMT, up 42 cents from their previous settlement. West Texas Intermediate (WTI) futures were at $52.80 per barrel, up 26 cents.
2019, August, 12, 12:45:00
ARAMCO, RELIANCE DEAL 20%
Aramco signed a letter of intent to take a 20% stake in Reliance’s oil-to-chemicals business in one of the largest ever foreign investments in India, Reliance announced.
2019, August, 9, 13:10:00
ARAMCO STABILIZE OIL MARKET
Saudi Aramco will cut customer allocations across all regions by a total of 700,000 barrels a day next month,
2019, August, 8, 11:05:00
INDIA'S DOWNSTREAM PROJECT UP TO $60 BLN
The new cost estimate of $60 billion for the refinery was given to Saudi Arabia’s energy minister Khalid al-Falih at a meeting with Indian Oil Minister Dharmendra Pradhan last month in New Delhi, said the four sources familiar with the talks between the two ministers.
2019, July, 20, 12:05:00
INDIA'S RENEWABLE WILL 60%
India is likely to obtain 63% of its installed power capacity from non-fossil fuel sources (including hydro) by 2029-30, according to the Central Electricity Authority (CEA). This would significantly exceed the country’s Paris agreement target of a 40% share of installed power capacity from non-fossil fuel sources by 2030.
