Mumbai: Reliance Industries will appoint the chairman of Saudi Aramco to its board as the Indian conglomerate expects to finalize an investment deal with the world's biggest oil producer this year.
Yasir Al-Rumayyan, Aramco's chairman and governor of the kingdom's sovereign wealth fund, will join as an independent director, Mukesh Ambani confirmed on Thursday at the Reliance annual general meeting, adding it will mark the beginning of Reliance's international plans.
"We look forward to welcoming Saudi Aramco as a strategic partner in our O2C business," Ambani said, referring to oil-to-chemicals refining. "I expect our partnership to be formalized in an expeditious manner during this year, after obtaining required regulatory clearances."
Deal between Reliance and Aramco
Reliance, the operator of the world's biggest refining complex, agreed to sell a 20 per cent stake in its oil-to-chemicals business to Aramco, but the sale was delayed after the pandemic hit the energy demand. The deal valued at $15 billion, was initially expected to conclude by March 2020.
"Despite several challenges due to COVID-19, we have made substantial progress in the past year in our discussions," Ambani said. He didn't share fresh details on the valuation.
Reliance's shares fell 2.4 per cent, the most since April, to Rs2,153.35.
With the global recovery from Covid-19 accelerating and oil prices rebounding, the appetite for big deals may be returning.
Key customer for kingdom's crude
Saudi Arabia has a history of tie-ups with India, which is the fourth-biggest buyer of the kingdom's crude, importing almost 700,000 barrels a day in May.
The kingdom's $430 billion wealth fund - the Public Investment Fund - recently invested about $1.3 billion in Reliance's supermarket unit, Reliance Retail Ventures.
Oil-to-chemicals is Reliance's key business, contributing about 60 per cent of the firm's revenue in the year through March. The Jamnagar refining complex, in western India, has the capacity to process about 1.36 million barrels of oil a day.