The decision to “re-evaluate” the deal between Reliance Industries and Saudi Aramco was not met with complete surprise. One just has to go back in time by two years when Mukesh Ambani, Reliance’s Chairman, first announced the transaction quite grandly to his shareholders.
If it had gone through, it would have seen a fund infusion of a massive $15 billion by Aramco in Reliance’s O2C (oil-to-chemicals) business for a 20 per cent stake. It would have increased Aramco’s sales of crude to India. For Reliance, a steady supply of oil to its refinery was assured plus a shareholding in Aramco.
A possibility emerging of the two collaborating in areas related to green energy could well play out. It is a theme that gets anyone in the business excited. A slew of new technologies are at various stages of evolution and some big money can easily alter the script to make it quite unrecognisable.
With scale, a lot of technology that looks expensive and largely distant can become accessible. It is scale that is key to success here and with two players of consequence joining hands, affordability can be achieved.