New Delhi: Saudi Aramco is in advanced talks for an agreement on all stocks to obtain business ownership of Reliance Industries Ltd, people with knowledge of the problem.
Saudi Arabia companies are discussing the purchase of around 20% of the shares in the dependency unit of around $ 20 billion to $ 25 billion – worth of Aramco shares, said people, asking not to be identified because the information is personal.
Reliance, supported by Indian billionaire Mukesh Ambani, can reach an agreement with Aramco as soon as the coming weeks, said those people.
The shares were extended extended to 2.6% in Mumbai after the Bloomberg News report.
The agreement will forge a closer alliance between the largest oil exporter in the world and one of the fastest growing consumers.
The tie and trade between the two countries has grown in recent years because India has seen increasing its energy security and Saudi Arabia reduce its support for Pakistan in the disputed Kashmir region.
Riyadh and New Delhi improve their relationship with “strategic partnerships” in 2019.
It will seal more than two years of negotiations and mark the agreement of all of the first shares of Aramco since the initial public offering in 2019.
Ambani confirmed about the agreement on the share assessment agreement of $ 15 billion in the same year.
The discussion was postponed by the emergence of the Coronavirus pandemic and the decline in oil prices.
The energy market since recovering, with crude oil prices jumped around 35% this year to almost $ 70 per barrel.
Aramco said last week a thorough test of the agreement with reliance was underway.
A transaction will increase the sale of Aramco crude to India.
For dependence, it will help to lock a stable oil supply for giant refineries and make Indian companies a shareholder in Aramco.
Based on Aramco’s market assessment of around $ 1.9 trillion, the transaction will provide dependence around 1%.
The potential details of the transaction are still negotiated, and the conversation can drag longer or messy, said people.
Representatives for Aramco declined to comment.
The Saudi International Communication Center Government does not immediately respond to comments that request email.
Saudi representative goal for Reliance said the company had nothing to add outside Ambani’s comments at the shareholder meeting in June, when the conglomerate appointed the chairman of Aramco Yasir al-Rumayyan to the council.
Ambani told Reliance to complete investment transactions with oil producers this year.
The Saudi government sells 2% of Aramco in the IPO, collecting nearly $ 30 billion.
It’s still the first time the biggest stock sales on the note.
The Crown Prince of Mohammed bin Salman, the ruler de facto, said in April that the kingdom was in talks to sell 1% of the shares in Aramco to the leading “global energy company.” He doesn’t reveal which one.
“This agreement can be very important in strengthening Aramco’s sales in the country where the company is located,” said the prince.
Saudi Arabia sent 613,000 barrels on raw day to India in July, about 10% of total exports.
The transaction will help Aramco achieve its goals more than multiplying distillation capacity to between 8 million and 10 million barrels of crude oil a day.
The Saudi firm has 3.6 million barrels on day capacity at the end of last year, including bets in joint ventures.