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Thu 18 Apr 2019 08:45 AM

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Adnoc says no plans to acquire Reliance Industries refinery stake

Saudi Aramco is said to be in 'serious discussions' to acquire the stake, with a possible agreement on valuation by early as June

Adnoc says no plans to acquire Reliance Industries refinery stake
Middle Eastern oil giants like Aramco and Adnoc have been expanding into downstream operations as they seek to move from being pure producers to becoming more integrated energy companies.

Abu Dhabi National Oil Co (Adnoc) has distanced itself from any possible investment in India’s Reliance Industries' refining and petrochemical businesses.

Indian billionaire Mukesh Ambani’s Reliance Industries is considering selling as much as 25 percent of its refinery business in a deal that could fetch at least $10 billion, sources told Indian media

Saudi Aramco is said to be in “serious discussions” to acquire the stake, with a possible agreement on valuation by early as June.

If it goes through, the sale could fetch between $10 billion and $15 billion, valuing Reliance’s refining and petrochemicals businesses at between $55 billion and $60 billion.

Citing sources, Bloomberg reported that Abu Dhabi National Oil Co has also been in discussions on the stake sale, which was strongly denied by UAE firm. 

An Adnoc spokesman said “there is no basis in fact to this speculation.” Aramco declined to comment in an emailed statement.

“Our company evaluates various opportunities on an ongoing basis,” Reliance said in an emailed statement, declining to comment further.

Middle Eastern oil giants like Aramco and Adnoc have been expanding into downstream operations as they seek to move from being pure producers to becoming more integrated energy companies.

Reliance’s debt has risen over the past few years, as the Indian conglomerate poured money into new sectors such as telecommunications, and stood at $32 billion at the end of December, data compiled by Bloomberg show.

Partnership talks

Reliance has been considering building a third plant at its giant Jamnagar complex in western India’s Gujarat state, Bloomberg News reported in November. The proposed facility would be able to process as much as 30 million tons of crude per year, which would boost its oil-refining capacity by about half, people with knowledge of the matter said at the time.

Ambani, Asia’s richest man, met with Saudi Energy Minister Khalid Al-Falih in December to discuss opportunities for joint investments in petrochemical, refining and communications projects, according to a tweet from the latter at the time.

Aramco has been targeting refining deals in India since at least last year, when CEO Amin Nasser told reporters that the firm wanted to double capacity to produce gasoline and other fuels.

*With Bloomberg

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