India's Reliance Industries talks to grant a minority stake in its refining assets to Saudi Aramco have hit a roadblock over the valuation and structure of the deal, two people familiar with the matter said.
State-owned Aramco, the world's biggest oil producer, plans to boost investment in refining and petrochemicals to secure new markets for its crude and sees growth in chemicals as central to its downstream strategy to reduce risk as oil demand slows.
Reliance initially held talks on offering Aramco at least 20 per cent in the special purpose vehicle covering refining, petrochemicals and marketing, with the focus on next phase expansion as well.
“Talks have stalled as Reliance is asking for a higher valuation and wants to transfer debt of the holding company to the new SPV (special purpose vehicle),” said one of the sources.
Reliance, controlled by Asia's richest man, Mukesh Ambani, operates the world's biggest refining complex with a capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar in western India.
It plans to expand capacity to 2 million bpd by 2030, according to plans shared with the government.
No immediate comment was available from Reliance and Saudi Aramco.