Reliance and Aramco dealDate: 23 November 2021 Tags: Miscellaneous
Saudi Arabia’s national oil company Aramco and Reliance industries are re-evaluating their proposed deal that was negotiated some years ago.
The deal involved investment by Aramco in Reliance Industries’ oil to chemicals (O2C) business.
The proposed investment plans by Aramco was affected by the Covid-19 pandemic. The prices of crude oil also fell as demands collapsed.
As profits and revenue experienced shortfall during this period, Aramco was unable to acquire 20 percent stake in Reliance’s O2C business.
Reliance also announced that it will become a net zero carbon emitter by 2030 and modify its Jamnagar refinery to produce only jet fuels and petrochemicals, affecting the deal.
Aramco feels that petrochemical assets should be given more time and investment so that the energy transition can be gradual.
The Jamnagar refinery, which is a major part of Aramco’s plans, will be converted into an integrated solar photovoltaic module factory, an advanced energy storage factory, an electrolyser factory and a fuel cell factory.
Aramco also feels that large part of its investments could be used to repay loans of Reliance and some amount would be used to fund green energy related projects.
Aramco is Saudi Arabia’s public petroleum and natural gas company. It is based in Dhahran. The company is counted among one of the largest by revenue.
The company is involved in managing Ghawar Field which is the world's largest onshore oil field and Safaniya Field, the world's largest offshore oil field.