Reliance, Saudi Aramco decide to re-evaluate proposed investment in O2C business
Mumbai, November 19, 2021
The Mukesh Ambani-led Reliance Industries Limited (RIL) today said it and Saudi Aramco had decided to re-evaluate their proposed investment in the O2C business, given the Indian conglomerate's ambitious foray into new and renewable energy.
"Due to evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context," a press release from Reliance said here late this evening.
"Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn," it said.
Reliance and Saudi Aramco had signed a non-binding Letter of Intent in August 2019 for a potential 20% stake acquisition by Saudi Aramco in the oil-to-chemicals (O2C) business of Reliance.
"Over the past two years, both the teams made significant efforts in the process of due diligence, despite Covid restrictions. This has been possible due to the mutual respect and long-standing relationship between the two organisations," the release said.
Reliance recently unveiled its plans for the New Energy & Materials businesses by announcing the development of Dhirubhai Ambani Green Energy Giga Complex at Jamnagar in Gujarat. It will be amongst the largest integrated renewable energy manufacturing facilities in the world.
The Four Giga Factories which will be part of the complex will include an integrated solar photovoltaic module factory for production of solar energy; an advanced energy storage battery factory for storage of intermittent energy; an electrolyser factory for production of green hydrogen and a fuel cell factory for converting hydrogen into motive and stationary power.
"Jamnagar, which accounts for a major part of the O2C assets, is envisaged to be the centre for Reliance’s new businesses of Renewable Energy & New Materials, supporting the NetZero commitment," the release said.
"The deep engagement over the last two years has given both Reliance and Saudi Aramco a greater understanding of each other, providing a platform for broader areas of cooperation.
"Saudi Aramco and Reliance are deeply committed to creating a win-win partnership and will make future disclosures as appropriate.
"RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco & SABIC for investments in Saudi Arabia.
"Saudi Aramco and RIL have a very deep, strong and mutually beneficial relationship, that has been developed and nurtured by both companies over the last 25 years. Both companies are committed to collaborate and work towards strengthening the relationship further in the years ahead," the release added.