Saudi Aramco strikes deal with Asia's richest man
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Saudi Arabia’s state-run oil company is making moves.
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Saudi Aramco on Monday announced it has agreed to purchase a 20 percent stake in the oil and chemicals business of Indian conglomerate Reliance Industries.
Reliance Industries is owned by Mukesh Ambani, Asia's richest man who is worth $45.6 billion, according to the Bloomberg Billionaires Index.
The acquisition, worth about $15 billion including debt, was the second big deal Aramco has made this year to bulk up its refining capabilities. In March, the oil giant acquired a 70 percent stake in the chemical firm Saudi Basic Industries Corp. for $69 billion.
Aramco hopes the deals will help it reach its goal of eventually doubling its refining capacity to 10 million barrels a day.
Monday’s deal came alongside the release of Aramco’s earnings for the first six months of the year, which showed profit slumped 12 percent to $47 billion.
“Despite lower oil prices during the first half of 2019, we continued to deliver solid earnings and strong free cash flow underpinned by our consistent operational performance, cost management and fiscal discipline,” Saudi Aramco President & CEO Amin Nasser said in the release.
Saudi Arabia hopes that by disclosing Aramco’s results investors will be more confident ahead of the oil company’s initial public offering, which could come as soon as 2020.
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An Aramco IPO, which could value the company at $2 trillion and raise $100 billion, would help the kingdom get the money it needs to upgrade its military and deliver on Crown Prince Mohammed Bin Salman's social agenda.
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