The highlight of the 42nd annual general body meeting of Reliance Industries on Monday was the announcement by the Chairperson Mukesh Ambani that Aramco, the Saudi Arabia-based global oil giant, would buy a 20 percent stake in his flagship Reliance Industries’ oil refinery and chemical business.
Aramco buying the shares at a cost of $75 billion (Rs 5.32 lakh crore), would be the biggest investment in the history of the company, said Mr. Ambani. The deal will obligate Saudi Aramco to supply 500,000 barrels of crude oil per day to Reliance’s twin refineries at Jamnagar in Gujarat. The total capacity of the two refineries is 68.2 million tonnes per annum.
Hinting in its 2018-2019 annual report to selling a large chunk of its stake, the company had said it intended to transform the Jamnagar refinery from fuel production to chemicals, “The objectives are to preserve as well as upgrade existing refinery margins, while maximising asset utilisation for a sustainable competitive cost of chemicals.”
Reliance Industries eventually aims to convert 70 percent of refined crude in the Jamnagar facility to competitive chemical building blocks of olefins and aromatics. “All refined products priced below crude shall be eliminated for chemicals at the initial stage,” the annual report said. “Final fuel de-risking shall target the elimination of gasoline, alkylate and diesel, synchronised to the global evolution of E-mobility and transport fuel demand decline.”
Meanwhile, Saudi Aramco reported a net profit of $46.9 billion for the first half of 2019-’20, down from $53.02 billion a year ago.