RIL chairman and managing director Mukesh Ambani said: “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil to chemicals division.” (Photo: RAVEENDRAN/AFP/Getty Images).

INDIA’S Reliance Industries Ltd (RIL) has agreed to sell a 20 per cent stake in its oil to chemicals business to Saudi Aramco, RIL chairman Mukesh Ambani said on Monday (12).

“Saudi Aramco and RIL today have agreed to a non-binding Letter of Intent (LOI) regarding a proposed investment in the Oil to Chemicals (O2C) division comprising the refining, petrochemicals and fuels marketing businesses of RIL,” Indian business giant said in a statement.

Saudi Aramco’s potential 20 per cent stake is based upon an enterprise value of $75 billion for the O2C division.

This would be one of the largest foreign investments ever made in India.

RIL chairman and managing director Mukesh Ambani said: “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil to chemicals division.

“We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment. Saudi Aramco’s interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India.”

Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years.

Saudi Aramco is the world’s largest and lowest cost-per-barrel producer of crude oil, is geographically close to India, and offers a wide range of crude supply options.

To date it has supplied approximately two billion barrels of crude oil for processing at RIL’s refinery in India’s Jamnagar.

RIL’s Jamnagar refinery is the largest and most complex refinery in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities.

The proposed investment would result in Saudi Aramco supplying 500 thousand barrels per day (KBPD) of Arabian crude oil to the Jamnagar refinery on a long term basis.