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Current Affairs

Reliance and Aramco deal

Date: 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.


The concerns

  • 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.