Saudi Aramco bought 20% of the oil and chemical business of the Indian conglomerate Reliance Industries for about US $15 billion. "This is the biggest foreign investment in Reliance's history," said company president Mukesh Ambani on Monday (12). "It is also among India's biggest foreign investments," he added.
The agreement will help to diversify Aramco's business operations, which focuses on pumping oil out of the Middle East. During an annual meeting of shareholders, it was agreed that the company will also provide Reliance refineries in Jamnagar, India, 700,000 barrels of oil per day in the long term. The refining complex has the ability to process bpd 1.4 million.
Giant Saudi Aramco is the world's most profitable company, registering profits larger than Apple and Exxon, for example. In this second, the oil company reported that it made US $46.9 billion in the first half of 2019, presenting a drop of 11% over the previous year, due to the global decline in crude oil price.
Meanwhile, Reliance will also sell half of its retail fuel business to BP, the largest global oil manufacturer, for 70 billion rupees (US $1 billion). Last week, the Indian company stated that it was forming a retail fuel joint venture with BP, in which Reliance would have a 51% stake.
"We have a very clear roadmap to becoming a zero net debt company for the next 18 months," Ambani said. The president of Reliance also said the company needs money because it is launching fiber-based fixed telephony broadband services.
The agreement between Indiana and Saudi Aramco covers all Reliance refining and petrochemical assets, as well as the remainder of the company's participation in its fuel retail business, after selling 49% of the shares to BP. The fuel stations will be transferred to the new joint venture, in which BP will hold a shareholding stake of 49%.
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