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

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.


Huawei in early talks with US firms to license 5G platform: executive

Updated 19 October 2019

Huawei in early talks with US firms to license 5G platform: executive

  • Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive
  • Huawei has spent billions to develop its 5G technology since 2009

WASHINGTON: Blacklisted Chinese telecoms equipment giant Huawei is in early-stage talks with some US telecoms companies about licensing its 5G network technology to them, a Huawei executive told Reuters on Friday.
Vincent Pang, senior vice president and board director at the company said some firms had expressed interest in both a long-term deal or a one-off transfer, declining to name or quantify the companies.
“There are some companies talking to us, but it would take a long journey to really finalize everything,” Pang explained on a visit to Washington this week. “They have shown interest,” he added, saying conversations are only a couple of weeks old and not at a detailed level yet.
The US government, fearing Huawei equipment could be used to spy on customers, has led a campaign to convince allies to bar it from their 5G networks. Huawei has repeatedly denied the claim.
Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive.
In May, Huawei, the world’s largest telecoms equipment provider, was placed on a US blacklist over national security concerns, banning it from buying American-made parts without a special license.
Washington also has brought criminal charges against the company, alleging bank fraud, violations of US sanctions against Iran, and theft of trade secrets, which Huawei denies.
Rules that were due out from the Commerce Department earlier this month are expected to effectively ban the company from the US telecoms supply chain.
The idea of a one-off fee in exchange for access to Huawei’s 5G patents, licenses, code and know-how was first floated by CEO and founder Ren Zhengfei in interviews with the New York Times and the Economist last month. But it was not previously clear whether there was any interest from US companies.
In an interview with Reuters last month, a State Department official expressed skepticism of Ren’s offer.
“It’s just not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves,” the person said. “If there are software bugs that are built in to the initial software, there would be no way to necessarily tell that those are there and they could be activated at any point, even if the software code is turned over to the mobile operators,” the official added.
For his part, Pang declined to predict whether any deal might be signed. However, he warned that the research and development investment required by continuously improving the platform after a single-transfer from Huawei would be very costly for the companies.
Huawei has spent billions to develop its 5G technology since 2009.