Reliance, Saudi Aramco to re-evaluate investment plan in O2C business
In a statement, the Indian company also announced the resumption of its proposed $15 billion agreement to sell a 20% share in its oil refinery and petrochemical division to Saudi Aramco.
Following its recent foray into the new energy sector, Reliance Industries Ltd announced the abandonment of its petition before the National Company Law Tribunal for the separation of its oil-to-chemical business. In a statement issued on Friday, the Indian company also announced the resumption of its proposed $15 billion agreement to sell a 20% share in its oil refinery and petrochemical division to Saudi Aramco. Following Reliance's entry into the new energy market, the two companies have decided to re-evaluate the proposed investment.
The share sale discussions, initially announced in August 2019, have been re-started in light of Reliance's recent ventures into the new energy industry, including a $10 billion investment in alternative energy over three years. To transition to green energy, it has already purchased a German manufacturer of photovoltaic solar wafers and formed an agreement with a Danish business to produce hydrogen electrolysers in India.
According to the corporate statement, due to the changing nature of Reliance's business portfolio, Reliance and Saudi Aramco have mutually agreed that it would be beneficial for both parties to re-evaluate the proposed investment in O2C sector in light of the changed environment. According to a press statement released on Friday, the business inked a "non-binding letter of intent in August 2019 for a prospective 20 per cent share acquisition by Saudi Aramco in Reliance's O2C Business."
Reliance has announced plans for new energy and materials industries, including constructing the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar. According to the firm, it will be one of the world's largest integrated renewable energy production complexes. The complex in Jamnagar will feature an integrated solar photovoltaic module factory for solar energy production, an advanced energy storage battery factory for intermittent energy storage, an electrolyser factory for green hydrogen production, and a fuel cell factory for converting hydrogen into motive and stationary power.
This accounts for a significant portion of the O2C assets and is intended to serve as the hub for Reliance's new renewable energy and new materials companies. In response to the withdrawal of the NCLT application, Reliance affirmed that its connection with Saudi Aramco is "deep and mutually beneficial" and that the two businesses are "truly dedicated to forging a win-win cooperation."