Aramco in talks to buy stake in refining business of India’s Reliance

The value Reliance Industries’ refining and petrochemicals businesses is said to be at around $55 billion to $60 billion. (File/AFP)
Updated 18 April 2019
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Aramco in talks to buy stake in refining business of India’s Reliance

  • The Times of India reported earlier that Aramco was in talks to buy up to a 25 percent stake
  • Aramco did not immediately respond to a request for comment

DUBAI/NEW DELHI: State oil giant Saudi Aramco, the world’s biggest oil producer, is in talks to buy a minority stake in the refining and petrochemicals businesses of India’s Reliance Industries Ltd, sources familiar with the matter said on Wednesday.
The Times of India reported earlier that Aramco was in talks to buy a stake of up to 25 percent, which could be worth around $10-15 billion, valuing the Indian company’s refining and petrochemicals businesses at some $55-60 billion.
Aramco’s discussions with Reliance were “serious,” one source said. Another source said talks with Reliance were so far for a 25 percent stake.
“Reliance has offered an integrated deal — a stake in existing refineries and the planned 600,000 barrels per day (Jamnagar) refinery, along with petrochemical business,” the second source said.
Aramco’s chief executive, Amin Nasser, said in February that the Saudi company was in talks on possible investments in Indian projects involving firms that included Reliance.
Aramco and Reliance declined to comment on Wednesday.
Reliance, controlled by Asia’s richest man, Mukesh Ambani, is India’s biggest refining and petrochemicals company and runs a 1.4 million barrels per day refining complex at Jamnagar in western India. It plans to expand capacity to 2 million bpd by 2030, according to plans shared with the Indian government.
Aramco is expanding its refining and petrochemical business globally by signing new deals and boosting the capacity of its existing plants.
Last year, Aramco and the United Arab Emirates’ national oil company ADNOC teamed up with state-run Indian refiners in a plan to build a 1.2 million bpd refinery and petrochemical project in Maharashtra state.
However, the planned refinery faces delays, as thousands of farmers have refused to surrender land for it and the Maharashtra government is looking to move the plant’s location.
Saudi Crown Prince Mohammed bin Salman visited India in February and said then that he expected investment opportunities worth more than $100 billion there over the next two years.
Ambani has traveled to Saudi Arabia at least twice since December, discussing joint investment among other issues with Aramco’s chief executive, Amin Nasser.


Boeing abandons 2019 outlook after 737 MAX aircraft groundings

Updated 24 April 2019
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Boeing abandons 2019 outlook after 737 MAX aircraft groundings

  • Boeing’s core earnings fell to $1.99 billion, or $3.16 per share
  • The planemaker said it faced $1 billion in increased costs in the first-quarter ended March 31

Boeing missed sharply-lowered Wall Street estimates for revenue and cashflow in the first quarter and suspended its 2019 outlook, as the world’s largest planemaker continued to suffer from the grounding of its 737 MAX jets.

The company said it faced $1 billion in increased costs in the first-quarter ended March 31, related to the 737 aircraft as it halted deliveries of the grounded planes to customers around the globe.

The company also said it was halting share buybacks.

The fallout of a second deadly crash within months in March has seen Boeing cut production of the jets to 42 aircraft per month, down from 52, and its operating cash flow in the first quarter was around $350 million lower than a year earlier.

Boeing is also spending on developing a fix for an anti-stall software known by the acronym MCAS, which has been a common link in the separate chains of events leading to the two crashes within a span of five months.

The company said it would be issuing a new forecast in the future when it has more clarity around the issues surrounding the 737 MAX.

First-quarter operating cash flow declined to $2.79 billion, from $3.14 billion, missing the Wall Street’s average estimate of $2.82 billion.

Revenue fell 2 percent to $22.92 billion, below analysts’ average estimate of $22.98 billion.

Excluding certain items, Boeing said its core earnings fell to $3.16 per share, in the quarter from $3.64 per share, a year earlier. Analysts had expected Boeing to earn $3.16 per share.