OIL & GAS

As Aramco’s profit plunges 44.4% in 2020, a deal with Reliance looks tougher

A 44.4 per cent plunge in FY20 net profit of Saudi Arabia’s state-owned energy giant Saudi Aramco and a slash in capex this year could make it harder to finalise a deal to invest in the oil to chemicals business of Reliance Industries Ltd.

In August 2019, RIL said it had signed a non-binding letter of intent with Aramco to sell a 20 per cent stake in the oil to chemicals business of Reliance Industries for as much as ₹1.03 lakh crore or roughly $15 billion.

The deal with Reliance Industries, if and when finalised, will allow Aramco to supply up to 700 (KBPD) or 5,00,000 barrels per day of crude oil on a long-term basis to Jamnagar refinery. But, one year later, RIL Chairman Mukesh Ambani said at the firm’s annual general meeting in July 2020 that the deal with Aramco “has not progressed as per the original deadline”.

Covid impact
As the coronavirus pandemic pulled down oil demand globally, Aramco said on Sunday that its net income fell sharply to $49 billion in FY20 from $88.2 billion in FY19.

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