Reliance Industries Ltd (RIL) and Saudi Aramco have mutually decided to re-evaluate the investment deal involving the O2C (Oil to Chemicals) business of the RIL considering the recent developments, according to reports. The deal under talks was worth $15 billion.
The November 19 statement of RIL read, “Due to the evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context.” The statement mentioned the evolving nature of Reliance’s business portfolio was taken into consideration. Also, Reliance has withdrawn its application filed with the National Company Law Tribunal(NCLT) to separate its O2C business from RIL. The statement said, “Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn,”
Notably, both the companies had earlier signed a non-binding letter in 2019 and were in talks considering the deal. RIL noted that two years of engagement with the Saudi Arabian Oil Company Saudi Aramco has provided a great platform of understanding. It said, “RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco & SABIC for investments in Saudi Arabia,” adding, “Both companies are committed to collaborate and work towards strengthening the relationship further in the years ahead.”
Meanwhile, Reliance has made considerable developments in the area of new energy and new materials. It has planned to achieve net carbon zero by 2035 through Cleantech initiatives. RIL announced the Dhirubhai Ambani Green Energy Giga Complex at Jamnagar recently which will be one of the largest integrated renewable energy manufacturing facilities in the world.
RIL stated, “Jamnagar, which accounts for a major part of the O2C assets, is envisaged to be the centre for Reliance’s new businesses of Renewable Energy & New Materials, supporting the Net Zero commitment.” Further, the Four Giga Factories part of the complex will consist of an integrated solar photovoltaic module to produce solar energy and an advanced energy storage battery factory to store intermittent energy. An electrolyser factory for the production of green hydrogen is also included with a fuel cell factory for converting hydrogen into motive & stationary power.
Reliance and Aramco rethink deal: What is Green Hydrogen?
Green Hydrogen is hydrogen that is produced entirely from renewable sources of energy. Since the hydrogen in this case is generated from electrolysis where electricity is derived from renewable sources of energy, the hydrogen is termed as ‘green’. Green Hydrogen can almost eliminate carbon emissions and is one of the cleanest forms of energy in the world. Prime Minister Narendra Modi had signalled the launch of a National Hydrogen Mission on 15 August 2021 and plan to transform India into a global green hydrogen production and export hub. Apart from RIL, GAIL (India) Limited, National Thermal Power Corporation Limited (NTPC), Indian Oil, Larsen and Toubro are all involved in green Hydrogen production.