As Oil Prices Fall Saudi Aramco-RIL Deal To Be The First Casualty


The collapse in oil prices has raised the risk that Saudi Aramco’s plan to buy $15-billion stake in Reliance Industries’ (RIL) hydrocarbon business may not go through, A US-based brokerage Bernstein report.

Saudi Aramco, the world’s largest exporter of crude oil, had agreed to a non-binding initial agreement last August to buy 20% stake in Reliance Industries’ oil to chemicals divisions with an enterprise value of $75 billion.

The oil to chemicals division included RIL’s world’s largest refining complex, petrochemicals and fuels marketing businesses.

As the oil prices have started collapsing due to demand destruction and supply glut, there is a growing risk that this deal may not go through, even if it does there will be 20 percent discount to Aramco valuation.

The Crude oil’s dramatic price collapse this year has shaken the global oil industry and sent some of the shale producers in the US to the bankruptcy court.

Prices have fallen 70% this year to about $20 a barrel, a two-decade low. Brent had fallen below $16 a barrel on
last week.