MOSCOW (MRC) -- Reliance Industries and Saudi Aramco have decided to re-evaluate their agreement for the Middle Eastern producer to buy a stake in the refining and petrochemical business of India's biggest private refiner, and both companies would look at broader areas of cooperation due to the changing energy scenario, said S&P.
Register Now Reliance said in a statement over the weekend that following this mutual decision by both companies, it would drop its plan to create a separate oil-to-chemicals unit, which was proposed to be named Reliance O2C.
"Due to evolving nature of Reliance's business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context. Consequently, the current application with National Company Law Tribunal for segregating the O2C business from Reliance is being withdrawn," the statement said.
Reliance and Aramco signed a non-binding letter of intent in August 2019 for a potential 20% stake acquisition by Saudi Aramco in the O2C business of Reliance. Over the past two years, both the teams made significant efforts in the process of due diligence, despite COVID-19 restrictions.
The decision to re-evaluate the USD15 billion proposed sale of a 20% stake sale in its oil to chemicals business to Saudi Aramco comes at a time when Reliance is stepping up efforts to embrace renewable energy business amid plans to be carbon neutral by 2035.
The oil to chemicals deal was supposed to gain momentum following the appointment of Aramco chairman Yasir Al-Rumayyan as an independent director to the board of Reliance Industries. Aramco wasn't immediately available for comment.
Reliance Chairman Mukesh Ambani announced plans in June to build a giga factory in Jamnagar for the storage of intermittent energy as part of the Dhirubhai Ambani Green Energy Giga Complex project.
Four giga factories will be part of the Jamnagar complex, which will include an integrated solar photovoltaic module factory; an advanced energy storage battery factory for storage of intermittent energy; an electrolyzer factory for production of green hydrogen; and a fuel cell factory for converting hydrogen into motive & stationary power.
As per MRC, Reliance Industries (RIL) has taken off-stream one of its polypropylene (PP) plants in Jamnagar, India for a scheduled maintenance. Thus, this unit with an annual capacity of 400,000 tons/year of PP was shut on 5 August 2021 and will remain idle for approximately one month. The local supply is expected to take a hit from the shutdown, especially when demand is recovering from the COVID-19 outbreak.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC