cloudyn.png
Wednesday December 11th, 2019 1:34AM

Saudi Aramco expands with $15B deal with India's Reliance

By The Associated Press
Related Articles
  Contact Editor

NEW DELHI (AP) — Oil giant Saudi Aramco is buying 20% of Indian conglomerate Reliance Industries' oil and chemicals business for about $15 billion, in a deal that gives it heft and diversity ahead of a long-awaited IPO.

For India, the deal amounts to one of the country's largest foreign direct investments.

Reliance Chairman Mukesh Ambani on Monday told an annual meeting of shareholders that Aramco will also supply Reliance's Jamnagar refineries with 700,000 barrels of oil a day on a long-term basis. The refining complex has a capacity to process 1.4 million barrels per day.

"This is the biggest foreign investment in the history of Reliance," he said. "It is also amongst the largest foreign investments ever in India."

The deal will help diversify the business operations of Aramco, which has been traditionally focused on pumping oil out of the Middle East. The state of Aramco's operations and finances, which have been secret for most of the company's history, is under intense scrutiny as investors prepare for the IPO. The company has started reporting earnings and raised money in a bond offering that have given a glimpse into its business.

Among some analysts' concerns is that it might be too exposed to the business of pumping oil or to the political climate in Saudi Arabia, where King Salman and his son, Crown Prince Mohammed bin Salman, who have taken a much more active role in controlling power centers.

Aramco is the most profitable in the world, posting bigger profits than the likes of Apple or Exxon and making it a potentially interesting investment target. On Monday, the company said it made $46.9 billion in the first half of this year, down about 11% from a year earlier due to a global decline in the price of crude oil.

Meanwhile, Reliance will also sell about half of its fuel retail business to global oil major BP for 70 billion rupees ($1 billion). Last week, Reliance said it was forming a fuel retailing joint venture with BP in which Reliance would own a 51% stake.

"We have a very clear road map to becoming a net zero debt company within the next 18 months," he said. He said the company also needs money because it is rolling out fiber-based fixed-line broadband services.

Reliance's deal with Aramco covers all of Reliance's refining and petrochemicals assets as well as the remainder of the stake the company has in its fuel retailing business after selling 49% to BP, Ambani said.Reliance's existing 1,400-odd gasoline pumps as well as 31 aviation fuel stations will be transferred to the new joint venture in which BP will hold a 49% equity stake. Reliance aims to expand the retail network to 5,500 gasoline pumps in the next five years, PTI said.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Utilities
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Saudi Aramco expands with $15B deal with India's Reliance
Oil giant Saudi Aramco is buying 20% of Indian conglomerate Reliance Industries' oil and chemicals business for about $15 billion
7:02AM ( 9 minutes ago )
Portugal rations gas as tanker drivers strike over pay
Portugal is rationing gas as tanker truck drivers begin an open-ended strike over pay
6:50AM ( 21 minutes ago )
South Korea to remove Japan from preferred trade list
South Korea is removing Japan from a list of nations receiving preferential treatment in trade in apparent retaliation for Tokyo's recent decision to downgrade Seoul's trade status
6:43AM ( 28 minutes ago )
Associated Press (AP)
Global stocks mixed as trade war worries worsen
Global stocks mixed as worries about the U.S.-China trade war worsen
5:15AM ( 1 hour ago )
Asian stocks rise as trade war worries worsen
Asian stocks gain as worries about the U.S.-China trade war worsen
1:29AM ( 5 hours ago )
Argentina's Macri bashed as voters back predecessor's ticket
Facing widespread discontent over austerity measures and low growth, Argentine President Mauricio Macri has been snubbed by voters who appear to have given a resounding primary victory to a ticket with his predecessor, Cristina Fernández
12:10AM ( 7 hours ago )
AP Business
Universal cancels controversial 'Hunt' in wake of shootings
Universal Pictures has canceled the planned September release of its controversial social satire "The Hunt," in the wake of recent mass shootings and amid criticism from President Donald Trump.
9:19PM ( 1 day ago )
Mining region struggles as it faces loss of biggest employer
Times are tough in a rural county in northeast Washington state because one of the region's biggest employers is shutting down
4:11PM ( 1 day ago )
Mass shootings give rise to bullet-resistant backpacks
Mass shootings have led to the rise in bullet-resistant backpacks for children but critics question whether companies are using tragedy as a marketing opportunity
7:18PM ( 2 days ago )
AP Business - Corporate News
Democratic hopefuls take aim at insurer and pharma profits
AP estimate finds $97B in pharma and insurer profits as Democratic hopefuls take aim at industry gains
7:42AM ( 23 hours ago )
The Latest: Mississippi plant sets job fair after raid
One of the Mississippi chicken processing plants caught in an immigration raid plans a job fair Monday
6:40PM ( 2 days ago )
The Latest: House chairmen demand info on Mississippi raids
Three Democratic congressmen are demanding that the Department of Homeland Security and the Department of Justice produce documents related to immigration raids at seven Mississippi chicken processing plants
5:48PM ( 2 days ago )
AP Business - Industries
Fukushima nuclear plant out of space for radioactive water
The utility company operating Fukushima's tsunami-devastated nuclear power plant says it will run out of space to store massive amounts of contaminated water in three years
11:27AM ( 2 days ago )
Short-lived German nuclear plant's cooling tower demolished
The cooling tower of a former nuclear power plant next to the Rhine River in Germany that was online for just 13 months has been demolished, 31 years after it stopped producing electricity
11:04AM ( 2 days ago )
Cyprus' rival leaders ready to meet UN chief next month
A United Nations spokesman says the rival leaders of ethnically divided Cyprus are ready to meet with the U.N. Secretary-General next month to map out the next steps toward a hoped-for resumption of formal reunification talks
11:03AM ( 2 days ago )
AP Business - Utilities
Portugal rations gas as tanker drivers strike over pay
Portugal is rationing gas as tanker truck drivers begin an open-ended strike over pay
6:50AM ( 21 minutes ago )
South Korea to remove Japan from preferred trade list
South Korea is removing Japan from a list of nations receiving preferential treatment in trade in apparent retaliation for Tokyo's recent decision to downgrade Seoul's trade status
6:43AM ( 28 minutes ago )
Autopsy of Epstein performed, but details yet to be released
The details of how Jeffrey Epstein died in his Manhattan jail cell over the weekend have yet to be released, but medical officials have performed an autopsy on the high-profile inmate accused of sexually abusing underage girls
6:32AM ( 40 minutes ago )
India's Reliance to sell 20% stake in oil business to Aramco
Indian conglomerate Reliance Industries says it's selling a 20% stake in its oil and chemicals business to Saudi oil giant Aramco, calling the deal among India's largest foreign direct investments.
6:09AM ( 1 hour ago )
Democrat Galloway launches Missouri gubernatorial campaign
Missouri Auditor Nicole Galloway is launching her Democratic campaign for governor by highlighting her efforts to uncover waste and fraud
6:05AM ( 1 hour ago )