NEW DELHI: Saudi Aramco is in advanced talks for an all-stock deal to acquire a stake in Reliance Industries Ltd’s oil refining and chemicals business, people with knowledge of the matter said.

       The Saudi Arabian firm is discussing the purchase of a roughly 20% stake in the Reliance unit for about US$20bil (RM84.72bil) to US$25bil (RM106bil) worth of Aramco shares, the people said, asking not to be identified because the information is private.

       Reliance, which is backed by Indian billionaire Mukesh Ambani, could reach an agreement with Aramco as soon as the coming weeks, the people said.

       A deal would forge closer ties between the world’s biggest oil exporter and one of the fastest-growing energy consumers.

       It would seal more than two years of negotiations and mark Aramco’s first all-stock deal since its initial public offering in 2019.

       Ambani confirmed talks about a deal with an implied stake valuation of US$15bil (RM63.54bil) that same year. Discussions were delayed by the onset of the coronavirus pandemic and slump in oil prices.

       Energy markets have since recovered, with crude prices jumping around 35% this year to almost US$70 (RM296.52) a barrel. Aramco said last week due diligence on a deal with Reliance was underway.

       A transaction would boost Aramco’s sales of crude to India. For Reliance, it would help to lock in a steady supply of oil for its giant refineries and make the Indian company a shareholder in Aramco.

       Based on Aramco’s market valuation of about US$1.9 trillion (RM8.04 trillion), a transaction would give Reliance a stake of around 1%.Details of the potential transaction are still being negotiated, and talks could drag on longer or fall apart, the people said. A representative for Aramco declined to comment. The Saudi government’s Centre for International Communication didn’t immediately respond to an email requesting comment.

       A representative for Reliance said the company does not have anything to add beyond Ambani’s comments at the shareholders’ meeting in June, when the conglomerate appointed Aramco chairman Yasir Al-Rumayyan to the board. Ambani had said Reliance could finalise an investment deal with the oil producer this year.The Saudi government sold 2% of Aramco in the initial public offering IPO, raising almost US$30bil (RM127.06bil). It’s still the largest first-time share sale on record.

       Crown Prince Mohammed Salman, the de facto ruler, said in April that the kingdom was in talks to sell a 1% stake in Aramco to a “leading global energy company.” He didn’t disclose which one.

       “This deal could be very important in strengthening Aramco’s sales in the country where this company resides,” the prince had said.

       Saudi Arabia shipped 613,000 barrels a day of crude to India in July, around 10% of its total exports. The transaction would help Aramco reach its goal of more than doubling refining capacity to between eight million and 10 million barrels of crude a day.

       The Saudi firm had 3.6 million barrels a day of capacity at the end of last year, including stakes in joint ventures.

       Earlier, Saudi Aramco joined a group led by ACWA Power to build a nearly US$1bil (RM4.23bil) solar power plant in the kingdom as the world’s largest oil-exporting nation expands renewable energy supply.

       Aramco will hold a 30% stake in the Sudair solar project, while ACWA and partner Water & Electricity Holding Co will each own 35%. — Bloomberg

       ACWA, itself 50% owned by the Saudi sovereign wealth fund, said it had reached financial close with lenders on the 1,500 megawatt project.Saudi Arabia has been slow to move away from fossil fuels in favor of clean energy. Energy Minister Prince Abdulaziz Salman announced the Sudair plant in April, saying it be the country’s largest when it starts operating. The plant will start producing power in second half of 2022.

       Saudi Aramco is looking to spend on renewable energy projects alongside the sovereign investor, the Public Investment Fund, as global economies seek to transition to greener energy. Aramco chief executive officer Amin Nasser said last week the company is studying hydrogen production and export even as it invests to expand oil output capacity and sales.

       The banks financing the project include Mizuho Financial Group, Riyad Bank, Korea Development Bank, Arab Petroleum Investments Corp, Al Rajhi Bank, and Standard Chartered Plc as senior lenders and mandated lead arrangers. Bank Al Bilad, Saudi British Bank and SMBC International Plc will provide equity bridge facilities. -- Bloomberg