Gulf Oil and Gas accountACCOUNT

Billionaire Ruias will Hold Refinery Talks with Aramco

Source: Bloomberg 2/3/2016, Location: Middle East

Essar Group, controlled by India’s billionaire Ruia brothers, has held preliminary discussions with the national oil companies of Saudi Arabia and Iran about selling a stake in its refinery business, people with knowledge of the matter said.

Exploratory talks began last month between Saudi Arabian Oil Co. and the Indian conglomerate about a stake in Essar Oil Ltd., which has a market value of about $5.5 billion, according to the people. Essar Group officials discussed a potential deal during a meeting with Aramco executives at the World Economic Forum in Davos, three of the people said, asking not to be identified as the information is private.

National Iranian Oil Co. also met Essar Group recently about a possible purchase of a stake in Essar Oil, according to three people. The talks, which touched on the refinery deal as well as a potential increase in purchases of Iranian crude by the private Indian refiner, took place two to three weeks ago in Iran, one of the people said.

Essar Group is selling assets after earnings were hurt by a fall in commodity prices, weak demand and lower capacity usage at its businesses. Saudi Aramco, the world’s biggest oil producer, is moving beyond producing and exporting crude and expanding into the processing and sale of oil products, which can fetch higher prices on world markets.

Backup Buyer
Shashi and Ravi Ruia, who founded Essar Group, plan to pay off some of the conglomerate’s loans with the proceeds from selling the refinery unit stake, the people said. Essar Group had been seeking about $3 billion from a sale of a 49 percent stake in the unit to Rosneft OAO, the people said.

Essar Oil shares were unchanged at 2:04 p.m. in Mumbai trading.

Rosneft signed a non-binding agreement in July to buy 49 percent of Essar Oil, conditional on due diligence and negotiations on price. Essar Group entered talks with Aramco in order to have an alternative buyer in case the discussions with Rosneft fall through, according to two of the people.

Aramco declined to comment in an e-mailed statement, while NIOC’s deputy director of international affairs, Mohsen Ghamsari, didn’t respond to three phone calls seeking comment. Essar Group said by e-mail it has signed a non-binding term sheet with Rosneft for exclusive negotiations about the potential purchase of a 49 percent stake in Essar Oil. It declined to comment further.

Due Diligence
“Rosneft has not changed its plans and continues work in accordance with the signed agreement on terms for the company’s possible entry into shareholding structure of Essar Oil,” the Russian company’s press office said in an e-mailed statement. “Talks on this project continue on the working group level in accordance with the existing agreement on exclusivity.”

Discussions with the Middle Eastern oil producers are at an early stage, and there’s no certainty they will proceed further in the negotiations, according to the people. Essar Group is still in talks with Rosneft, and the Russian company is likely to complete due diligence in the next month, one of the people said.

Saudi Aramco plans to boost its total refining capacity to between 8 million and 10 million barrels a day by the end of the decade from about 5.4 million currently. The state-owned company is maintaining investments in oil and gas projects amid the fall in crude prices, Chairman Khalid Al-Falih said last month, and is also studying options including the sale of shares in the parent company and downstream refining and chemical operations.

Oil Treating & Refining News in Saudi Arabia >>

Iran >>  3/17/2019 - Iranian President Hassan Rouhani inaugurated the onshore refining facilities of phases 13 and 22-24 of the supergiant South Pars gas field in Assaluye...
China >>  3/14/2019 - McDermott International, Inc. announced the successful commercialization and startup of its single largest CDAlky® reactor to date at PetroChina's ref...

Hungary >>  3/13/2019 - Frames has been awarded a contract to supply two desalters (electrostatic coalescers) to leading Hungarian oil and gas company MOL Group for the Duna ...
Iran >>  2/24/2019 - Operator of South Pars Phase 13 development projects said new Liquefied Petroleum Gas (LPG) units had come on-stream in the onshore refinery of the ph...

Related Categories: Agents, Anti-foaming  Aromatic Solvents  Butene  Cleaning  Corrosion Inhibiting  Crude Oil  Diesel Fuel  Ethylene  Fluids Drilling, Completion, Workover & Stimulation  Fluids/Chemicals  Fracturing Sand  Fuel oil  Gasoline (Lead free)  General  Grout  Jet fuel  Kerosene. Domestic use  Lubricants, Oils & Greases  Nitrogen  Oil Treating & Refining  Polyethylene  Polyvinyl chloride  Propane  Sand, Sandblast  Summer Diesel  Surfactants 

Related Articles: Aromatic Solvents  Butene  Cleaning  Corrosion Inhibiting  Crude Oil  Diesel Fuel  Ethylene  Fluids Drilling, Completion, Workover & Stimulation  Fluids/Chemicals  Fracturing Sand  Fuel oil  Gasoline (Lead free)  General  Jet fuel  Kerosene. Domestic use  Lubricants, Oils & Greases  Nitrogen  Oil Treating & Refining  Polyethylene  Polyvinyl chloride  Propane  Sand, Sandblast  Surfactants 


Saudi Arabia Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.