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According to persons familiar with the situation, Saudi Aramco is in advanced talks to buy a share in Reliance Industries Ltd's oil refining and chemicals sector in an all-stock deal.

According to the people, the Saudi Arabian corporation is in talks to buy a roughly 20% stake in the Reliance unit for $20 billion to $25 billion in Aramco shares, who asked not to be identified because the information is confidential.

According to the people, Reliance, which is funded by Indian billionaire Mukesh Ambani, might negotiate an agreement with Aramco in the coming weeks.

Following the Bloomberg News article, shares in Reliance extended their advances to as much as 2.6 per cent in Mumbai.


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A pact would bring the world's largest oil exporter and one of the fastest-growing consumers closer together. As India seeks to strengthen its energy security and Saudi Arabia lessens its support for Pakistan over the disputed territory of Kashmir, the two countries' ties and trade have strengthened in recent years. In 2019, Riyadh and New Delhi formalised their ties as a "strategic alliance."

It would bring an end to more than two years of talks and be Aramco's first all-stock deal since its IPO in 2019.

Ambani revealed conversations for a deal with an indicated stake value of $15 billion in the same year. The beginning of the coronavirus epidemic and a drop in oil prices caused the discussions to be postponed.

Crude prices have risen by roughly 35% this year to nearly $70 a barrel, indicating rebounding the energy markets. Last week, Aramco announced that due diligence on a deal with Reliance was in the works.

An agreement would increase Aramco's crude sales to India. It would enable Reliance to secure a consistent supply of oil for its massive refineries and make Reliance a shareholder in Aramco. A purchase would give Reliance a 1% share in Aramco, based on the company's market value of $1.9 trillion.

Details of the proposed sale are still being worked out, and the talks might drag on or fall apart, according to the sources.

Aramco's spokesperson declined to comment. An email to the Saudi government's Center for International Communication was not immediately returned.

Saudi objectives

Reliance's spokesperson said the business had nothing to add to Ambani's remarks during the shareholders' meeting in June when the conglomerate named Aramco Chairman Yasir Al-Rumayyan to the board of directors. Ambani had stated that a deal between Reliance and the oil giant might be finalised this year.

The Saudi government raised about $30 billion by selling 2% of Aramco in the initial public offering. It remains the largest first public offering (IPO) ever.

The kingdom's de facto ruler, Crown Prince Mohammed bin Salman, stated in April that it was in talks to sell a 1% stake in Aramco to the major global energy business. He didn't say which one it was.

The prince had remarked, This contract might be very crucial in expanding Aramco's sales in the country where this company lives.

In July, Saudi Arabia sent 613,000 barrels of crude per day to India, accounting for around 10% of the country's total exports.

The deal would assist Aramco in meeting its objective of more than doubling refining capacity to between 8 and 10 million barrels of crude per day.

At the end of last year, the Saudi corporation had 3.6 million barrels per day of capacity, including joint venture shares.

(Source: Times of India)