RIL may pick stake in Saudi petro project

Reliance Industries (RIL) may pick up a stake in the $9.8-billion Saudi Aramco petrochemical project in Saudi Arabia.

ExxonMobil and Dow Chemicals are also believed to be in the race for a stake in the project which will be completed by the end of 2008.

RIL officials refused to comment on the deal. However, industry analysts pointed out that RIL had sometime back held discussions with Saudi Arabia government officials on investment opportunities in the country.

In fact, a fresh round talks has been on for the last few months. "We got know that RIL has been shortlisted by Saudi Aramco for investing in the project," an analyst said.

The overall cost of the petrochemical project has risen to $ 9.8 billion from the originally estimated $ 8.5 billion.

The shareholders of the company are investing $ 4 billion, while the rest will come from loans, mainly from the Japan Bank of International Cooperation, a public investment fund, Islamic banks and local financial intermediaries.

Saudi Aramco and Sumitomo Chemical, the second promoter of the project, had formed a joint venture called PetroRabigh in September 2005 to undertake project.

Last month, both the promoters signed the final project financing documents for the largest integrated refining and petrochemical complex in the Red Sea town of Rabigh.

The complex is expected to produce 2.4 million tonne of petrochemical solids and liquids per year and big quantities of gasoline and other refined products.

Saudi Aramco owns and operates a topping refinery at Rabigh with a crude distillation capacity of 400,000 barrels per day (bpd).

It also has two joint venture partners in Saudi-based refinery operations. The 320,000 bpd Sasref refinery at Jubail is operated with Royal Dutch Shell, while ExxonMobil is the partner in the Samref refining complex at Yanbu.

RIL has exploration rights to one of the large deepwater blocks in the Sultanate of Oman. In addition, it has a 25 per cent stake in an exploration block in Yemen, which has struck oil.

The largest Indian company in private sector is exploring opportunities for expanding its overseas ventures aggressively in Yemen, Sudan and Colombia. RIL stock today gained 1.31 per cent on Bombay Stock Exchange to close at Rs 1170.10.