Page 9 - AsianOil Week 47 2021
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AsianOil SOUTH ASIA AsianOil
announced that the two companies had “agreed gradual commissioning of the Jazan refinery on
to form a long-term partnership in our oils to Saudi’s Red Sea coast.
chemicals division […] This signifies the perfect With one move, the deal with Reliance
synergy between the world’s largest oil producer would have increased Aramco’s gross partic-
and world’s biggest integrated refinery and pet- ipated refining capacity to 8.6mn bpd and its
rochemicals complex.” net refining capacity to 4.3mn bpd once Jazan
He added that while the deal was subject to reaches its 400,000 bpd capacity and the troubled
due diligence, by ensuring Aramco crude is used Pengerang Petrochemical Co. (PRefChem) facil-
as feedstock for the refinery, the deal could pay ity in Malaysia is finally commissioned.
for itself within 18 months. However, if successful, the talks with ONGC
The 20% stake was to cost Aramco around will likely compensate for some of the reduction,
$15bn based on a Reliance O2C valuation of with the Indian firm saying the parties would
$75bn. According to various well-placed sources explore “long-term supply contracts for the
speaking to financial and industry publications sale and purchase of crude, refined petroleum
in recent months, the transaction was to take the and petrochemical products to create secure
form of an all-stock deal, the first since Aram- and competitive energy sources for the Indian
co’s world record initial public offering (IPO) in market.”
2019. It highlighted that the “strategic alliance”
Its cancellation comes despite growing would likely leverage the Saudi firm’s Aramco
momentum behind the deal, with Aramco’s Trading Co. (ATC) subsidiary as well as ONGC’s
chairman Yasir Al-Rumayyan appointed to Reli- Mangalore Refinery and Petrochemicals Ltd.
ance’s board of directors in June in a move seen (MRPL), ONGC Petro-additions Ltd. (OPaL)
as a precursor to the agreement’s finalisation. and ONGC Mangalore Petrochemicals Ltd.
In spite of the conclusion of talks, Reliance (OMPL) affiliates.
said that the companies remain “deeply commit- ATC has grown rapidly since it was estab-
ted to creating a win-win partnership and will lished a decade ago, while the ONGC subsidi-
make future disclosures as appropriate”, adding aries boast significant downstream processing
that it would continue to be Aramco’s “preferred capabilities. MRPL is dedicated to the operation
partner for investments in the private sector in of a 300,000 bpd refinery of the same name in
India and will collaborate with Saudi Aramco & Karnataka State while OMPL operates 1.2mn
SABIC for investments in Saudi Arabia”. tpy of paraxylene and benzene facilities that are
integrated with MRPL.
Strategic shift OPaL is a JV with GAIL (India) Ltd and Guja-
Aramco has a long-stated aim of achieving a rat State Petroleum Corp. (GSPC) which owns
global refining slate of 8-10mn bpd and it has and operates a 3.7mn tpy world-scale petro-
developed several international joint ventures chemicals complex at Dahej in Gujarat.
(JVs) aimed at increasing guaranteed markets While the details of potential offtake agree-
for its upstream production – or dedicated crude ments are yet to be agreed, MRPL alone would
outlets as it calls them. This was to have played an take Aramco’s gross participated refining capac-
important role in the Reliance deal with Aramco ity to 7.1mn bpd with the petrochemical units
to have supplied 500,000 bpd of crude feedstock likely to receive products refined by the Saudi
to Jamnagar following the deal. firm’s domestic facilities.
At year-end 2020, it had a gross refining Meanwhile, both announcements included
capacity of 6.4mn bpd and a net capacity of future-looking statements that suggest Aramco
3.6mn bpd and according to consultancy IGM will collaborate with the Indian firms on clean
Energy, those figures are now averaging around energies, with hydrogen and renewables likely to
6.7mn bpd and 3.8mn bpd, largely owing to the features in any such developments.
Week 47 26•November•2021 www. NEWSBASE .com P9
