Reliance Industries Ltd (RIL) said it will be Saudi Aramco’s “preferred partner” for investments in India’s private sector after the Mukesh Ambani-led firm and the world’s biggest oil producer “mutually” called off more than two-years of talks to sell a 20 per cent stake in its oil to chemicals (O2C) business for $15 billion.

With the potential deal off the table, Reliance Industries has also decided not to pursue the application filed with the National Company Law Tribunal (NCLT) for separating the O2C business from RIL and is being withdrawn, Reliance Industries said in a statement.

Oil-to-chemicals is the most valuable part of RIL’s business. Though the deal didn’t materialise, Reliance said it will also collaborate with Saudi Aramco and SABIC for investments in Saudi Arabia.

Re-evaluating the tie-up

The two firms have decided to “re-evaluate” the potential partnership in the light of the changed scenario with Reliance announcing ambitious plans on new energy and materials businesses in line with the global push towards green energy to combat climate change.

Reliance has unveiled plans to develop Dhirubhai Ambani Green Energy Giga Complex at Jamnagar, where the company’s refinery is located.

“Saudi Aramco could be interested in investing in some of those areas,” a source familiar with the matter said. “Potential deals could be far bigger than the $15-billion Aramco was looking to invest in the O2C business,” the source said.

“Reliance is not departing from the partnership with Saudi Aramco,” the sources said. “Reliance is re-calibrating its engagement with Aramco in the changed environment. It will look at ways to work together in a changed scenario,” the source said.

Reliance O2C Ltd — the wholly-owned refining, marketing and petrochemicals subsidiary — was being carved out of Reliance Industries, with assets worth $42 billion to be funded by a long-term interest bearing loan of $25 billion by RIL to O2C along with equity of $12 billion.

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