Reliance, Aramco and the ghost of OPEC

Reliance, Aramco and the ghost of OPEC

Mukesh Ambani’s Reliance Industries is reportedly in talks to sell a 25% stake in its refinery and petrochem business to Saudi Aramco for an estimated $10-15 billion. Details of the deal aren’t known yet, but it could be a gateway to India for the Saudi state-owned company that boasts of the world’s biggest crude oil reserves; its partnership with Indian state-run refiners and retailers for a refinery in Ratnagiri, Maharashtra, has not made headway.

Fresh from a $10-billion bond issue, the Saudi company has announced a forward integration plan, and is on the lookout for investment opportunities. The current question, however, is what Reliance sees in Aramco. The short answer: crude oil supplies at preferential rates from an equity partner.

That would be a win-win if prices suit both sides. Perhaps Reliance is keen on this because the global price of its chief input, crude oil, Read More

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