Saudi Arabian state-owned oil company Saudi Aramco says that the talks are on, to buy a 20 per cent stake in Reliance Industries Limited (RIL). RIL had sold, the sale of its oil-to-chemical (O2C) business to the world’s largest crude oil producer for $ 15 billion. This partnership kooks promising for the growth of RIL.
Reliance will inform shareholders about the deal
Speaking to the media after the financial results were released on Sunday, Saudi Aramco CEO Amin Nasir said, “We are still in talks with Reliance.” Work on this deal is in progress. We will inform our shareholders about the Reliance deal at the appropriate time. In the second quarter, Saudi Aramco’s profit fell 73 per cent to $ 6.57 billion. The company’s net income has fallen by 50 per cent in the first half.
The deal was signed last year in Reliance-Aramco
In the last financial year, RIL had announced to sell 20 per cent of its O2C business to Saudi Aramco. In July last month, RIL Chairman Mukesh Ambani said that the deal with Aramco was not progressing as per its actual timeline. Mukesh Ambani had said that the deal has been delayed due to unforeseen circumstances in the energy market.
Deal expected to be completed by early 2021
At Reliance’s AGM on July 15, Mukesh Ambani said that we value our 2-decade-old relationship with Saudi Aramco and are committed to long-term partnerships. We will propose to close our O2C business as a separate subsidiary to the National Company Law Tribunal (NCLT) to facilitate our partnership opportunity. Mukesh Ambani expects the Reliance-Aramco deal to be completed by early 2021.
Aramco’s net profit in the second quarter was $ 6.57 billion
In the second quarter of the calendar year 2020, Saudi Aramco’s net profit fell 73 per cent to 24.6 billion riyals, or $ 6.57 billion. The net profit of the company was 92.6 billion riyals i.e. $ 24.69 billion in the same period a year ago. Aramco’s free cash flow in the second quarter stood at 6.1 billion. It was $ 21.1 billion in the first half of 2020.