Mukesh Ambani’s Reliance Industries is reportedly in talks to sell a 25% stake in its refinery and petrochem business to Saudi Aramco for an estimated $10-15 billion. Details of the deal aren’t known yet, but it could be a gateway to India for the Saudi state-owned company that boasts of the world’s biggest crude oil reserves; its partnership with Indian state-run refiners and retailers for a refinery in Ratnagiri, Maharashtra, has not made headway. Fresh from a $10-billion bond issue, the Saudi company has announced a forward integration plan, and is on the lookout for investment opportunities. The current question, however, is what Reliance sees in Aramco. The short answer: crude oil supplies at preferential rates from an equity partner.
That would be a win-win if prices suit both sides. Perhaps Reliance is keen on this because the global price of its chief input, crude oil, seems to be on an uptrend again. Oil hit a five-month high of over $72 per barrel this week, defying expectations that a rise in US shale oil production would cap the price.
