Reliance-Aramco Indian refinery talks continue

Saudi Energy Minister Khalid al-Falih addresses the media flanked by India’s Oil Minister Dharmendra Pradhan and Saudi Aramco Chief Executive Officer Amin Nasser. (Reuters)
Updated 26 July 2019

Reliance-Aramco Indian refinery talks continue

  • The Kingdom’s efforts to expand its operations in the subcontinent have not stalled, despite reported issues

NEW DELHI: Saudi Arabia’s Energy Minister Khalid Al-Falih said state-run Saudi Aramco’s talks with Reliance Industries to buy a minority stake in the Indian conglomerate’s refining assets have not stalled.

The two companies, Reliance and Aramco, are talking with a lot of goodwill, with good intention,” Al-Falih told Reuters in an interview.

Reliance, controlled by Asia’s richest man Mukesh Ambani, operates the world’s biggest refining complex with the capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar in western India.

State-owned Aramco, the world’s biggest oil producer, plans to boost investment in refining and petrochemicals to secure new markets for its crude amid a recent demand slowdown.

Reuters reported on Tuesday that talks between the companies had hit a roadblock as Reliance was keen on a higher valuation.

But Al-Falih, who met Indian oil minister Dharmendra Pradhan in New Delhi on Thursday, said he was “optimistic” that a deal between the two companies would work out.


Saudi Aramco is the world’s biggest oil producer.

“We still see daylight. We will announce the terms when they are concluded,” he said.

Aramco and the UAE’s national oil company ADNOC teamed up with state-run Indian refiners last year in a plan to build a 1.2 million bpd refinery.

But the plan has faced delays as farmers refused to surrender land, forcing the government of the region of Maharashtra to find a new location.

India has invited Saudi Arabia to help build its strategic petroleum reserves, Pradhan tweeted after his meeting with Al-Falih.

Pradhan asked the Kingdom to continue to ensure balance in oil markets, and raised concerns over disturbances in the Strait of Hormuz affecting the movement of crude and gas tankers.

Saudi Arabia is the second biggest oil supplier to India after Iraq.

Al-Falih said the Kingdom will supply additional oil to India if required. New Delhi suspended purchases of Iranian oil in May, under pressure from US sanctions against Tehran’s nuclear program. 

Saudi index drops amid global weakness, Aldar tumbles in Abu Dhabi

Updated 20 min 51 sec ago

Saudi index drops amid global weakness, Aldar tumbles in Abu Dhabi

DUBAI: Most Middle East markets dropped on Sunday amid thin trading volumes, mirroring a tumble in global stocks last week and weighed down by sliding oil prices. 
Brent crude futures fell 58 cents on Friday, or 1%, to settle at $59.34 a barrel, while Wall Street stocks tumbled after President Donald Trump told U.S. companies to look at alternatives to China for manufacturing, following Chinese retaliatory tariffs on American goods. 
The Saudi index was the worst performer, losing 2.4%, dragged down by banks and the petrochemical sector. The rest of the region was also in red territory, except the Egyptian and the Bahraini exchanges, which were little changed. 
"We seem to be getting dragged down by international markets," said a Dubai-based trader. "It’s a quiet day, not the good kind." Islamic lender Alinma Bank was among the worst performers in Saudi Arabia, shedding 4%. 
The bank earlier this month posted a 12% rise in second-quarter net profit. 
In the petchem sector, Saudi Kayan Petrochemical Co was heavily hit, losing 3.9%, while blue chip Saudi Basic Industries Corp (SABIC) lost 2.5%. Arqaam Capital said in a research note on Sunday it expected some weakness in the Saudi stock market this week as global index compiler MSCI completes the second phase of its upgrade of Saudi Arabia to emerging market status. 
"We expect to see circa $6.8 billion of passive inflows into KSA (Saudi Arabia) as part of Phase 2 of EM inclusion, bringing KSA to its full weight," said the Dubai firm. "However, it appears that the KSA index trade is mostly over, as we have already recently seen significant selling pressure, and expect to see weakness into the trade this week."
In the UAE, large property developers were hurt. In Dubai, where the index lost 1.9%, Emaar Properties lost 3.9%, while in Abu Dhabi, where the index shed 1.4%, Aldar Properties tumbled 4.1%. 
Outside of the Gulf, the Egyptian index edged up 0.1%, as a 1.4% drop by Orascom Investment Holding was partly offset by a 3.7% spike in Egyptian Resorts Co, which was the best performer on Sunday and among the stocks seeing the highest trading volume.