Foreign brokerage firm Credit Suisse believes that global oil producer and refining giant Saudi Arabian Co, better known as Saudi Aramco, may revive its interest in buying the 20% stake in Reliance Industries Ltd’s energy business if global crude oil prices continue their upward trend.
“The deal is not yet closed and with Saudi Aramco not bidding for BPCL (Bharat Petroleum Corp), it is possible that with recovery in oil prices above $50-55/bbl, the deal could be revived,” the brokerage house said in a note.
In 2019, the billionaire chairman and managing director of Reliance Industries Mukesh Ambani had announced to shareholders that the company had entered into a non-binding memorandum of understanding with the West Asian company for the sale of 20% stake in RIL’s oil-to-chemical business at an enterprise valuation of $75 billion.
However, the onset of the Covid-19 pandemic in March and the crash in global crude oil prices in the first quarter of 2020 lead to Saudi Aramco shelving all capital investment plans for the foreseeable future. In October, Aramco’s chief executive officer Amin Nasser told Energy Intel that the company’s “long-term strategy hasn’t changed”.
At its end, RIL has prepared the court for an eventual sale of a stake in its energy business as in April it announced that it will be hiving off its oil-to-chemical business to subsidiary Reliance O2C.