Saudi Aramco’s decision to invest in Reliance Industries’ oil-to-chemicals business is the first step towards a strategic partnership which will entail carving out the business into an independent company and growing it, says RIL’s executive director, PMS Prasad. The deal will ensure crude supplies for RIL’s refinery and help Aramco tap demand in India.
How is the deal structured?
The oil-to-chemicals (O2C) business, which includes refining, petrochemical and our 51% stake in fuel retail joint venture (with BP), will be carved out into a division where Aramco will have an economic interest. It will be ring-fenced, with its own board, key management personnel and accounts; any deals with the rest of RIL will be on an arm’s length. The instruments that we will issue to Aramco for their investment will comply with Securities and Exchange Board of India and other regulatory norms. What will be the instrument and its terms will be decided between both parties. Aramco will pay RIL $15 billion. If the O2C board will have five members, two seats will be given to Aramco. Read More
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