India's Reliance to sell 20% stake in oil business to Aramco

Akash Ambani with wife Shloka pose for the media at the 42nd Annual General Meeting (Post-IPO) of Reliance Industries Limited in Mumbai, India, Monday, Aug. 12, 2019. (AP Photo/Rajanish Kakade)The Associated Press
Akash Ambani with wife Shloka pose for the media at the 42nd Annual General Meeting (Post-IPO) of Reliance Industries Limited in Mumbai, India, Monday, Aug. 12, 2019. (AP Photo/Rajanish Kakade)

Indian conglomerate Reliance Industries said on Monday that it is selling a 20% stake in its oil and chemicals business to Saudi oil giant Aramco, calling the deal among India's largest foreign direct investments.

The Press Trust of India news agency said the deal is worth $15 billion.

Reliance Industries Chairman Mukesh Ambani told an annual meeting of the company's shareholders that Aramco will also supply Reliance's Jamnagar refineries with 700,000 barrels of oil a day on a long-term basis. The refining complex has a capacity to process 1.4 million barrels per day.

"This is the biggest foreign investment in the history of Reliance," he said. "It is also amongst the largest foreign investments ever in India."

Ambani said Reliance will also sell about half of its fuel retail business to global oil major BP for 70 billion rupees ($1 billion).

Last week, Reliance said it was forming a fuel retailing joint venture with BP in which Reliance would own a 51% stake.

"We have a very clear road map to becoming a net zero debt company within the next 18 months," he said. He said the company also needs money because it is rolling out fiber-based fixed-line broadband services.

Reliance's deal with Aramco covers all of Reliance's refining and petrochemicals assets as well as the remainder of the stake the company has in its fuel retailing business after selling 49% to BP, Ambani said.

Reliance's existing 1,400-odd gasoline pumps as well as 31 aviation fuel stations will be transferred to the new joint venture in which BP will hold a 49% equity stake. Reliance aims to expand the retail network to 5,500 gasoline pumps in the next five years, PTI said.