Jio Platforms now more valuable than rest of RIL businesses put together

At Wednesday’s price, RIL’s market capitalisation stood at Rs 8.64 trillion. This means, the other businesses are being valued by the Street at Rs 4.28 trillion

Reliance Industries’ (RIL’s) deal with Facebook to sell 9.99 per cent in Jio Platforms has two messages for the oil to telecom major’s shareholders. The key one is that Jio Platforms is now more valuable than all other businesses of RIL put together, including refining, petrochemicals and retail.

Consider this: Facebook is buying 9.99 per cent stake in Jio Platforms, a 100 per cent subsidiary of RIL, for Rs 43,574 crore. This translates into a market/equity value of Rs 4.36 trillion for Jio Platforms. RIL’s stock gained over 10 per cent after the deal was announced. At Wednesday’s price, RIL’s market capitalisation stood at Rs 8.64 trillion. This means, the other businesses are being valued by the Street at Rs 4.28 trillion.

ALSO READ: Why Facebook is spending billions for a minority stake in Reliance Jio

The other message is that the deal has kick-started the monetisation of digital assets and will help RIL reduce debt, create an incremental revenue stream and could lead to higher valuations for its consumer facing verticals, especially Reliance Retail. The news of falling leverage levels is positive as it came at a time when its core oil and gas vertical was facing major headwinds because of the collapse of crude oil prices. This had raised concerns over the completion of the deal with Aramco, wherein the world’s biggest oil producer was looking at picking up 20 per cent stake in RIL’s chemical and refining business in a deal valued at $15 billion. With the fresh investment from Facebook, leverage concerns have receded…

Which country can boost crude supply to offset the attack on Saudi Arabia?

The attacks cut Saudi production by 5.7 million barrels a day and officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery

International News: Here is a list of countries that could boost crude production to offset losses from Saudi Arabia in the event that the disruption to supplies from the attacks on its Abqaiq and Khurais processing facilities lasts longer than initially expected. It’s not a long list and much may not be accessible.

The attacks cut Saudi production by 5.7 million barrels a day and officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery. The maximum spare capacity that could be brought into production in the coming weeks is estimated at about 3.9 million barrels a day.

That figure should be treated as a exercise in optimism, though. It includes restarting production from the Neutral Zone shared by Saudi Arabia and Kuwait, as well as tapping Saudi Arabia’s own spare capacity, much of which may also have to be processed at the Abqaiq or Khurais facilities and therefore be unusable.

On paper, Saudi Arabia has about 1.7 million barrels a day of spare production capacity, but the precise location of that reserve is unclear. If it is in the giant Ghawar, Shaybah or Khurais fields, it’s unlikely to be of any use, as crude from those fields is processed at Abqaiq. There is some spare capacity at offshore fields, such as Manifa and Safaniyah. Offshore crude is not processed at Abqaiq, so these fields could be pressed into service…

Saudi, Gulf stocks fall in first session after attacks on Aramco oil plants

Saudi Basic Industries (SABIC), the kingdom’s biggest petrochemicals firm, was down 2.4%

Saudi stocks fell sharply on Sunday, after attacks on two plants at the heart of the kingdom’s oil industry a day earlier knocked out more than half of Saudi crude output. Sunday’s decline extended a losing spree for Saudi stocks, which in recent weeks have been hit by expensive valuations, weak oil prices and concerns about the economic outlook.

The drone attacks were carried out by Yemen’s Houthi group, its military spokesman said on Al Masirah TV. The index opened down 2.3% but later pared some losses. At 0914 GMT, the Saudi market was down 1.3%. The index has lost all its gains this year and is down about 18% from its 2019 high of 9,403 points seen in early May. The index’s earlier gains were fueled by Saudi Arabia‘s entry into the MSCI and FTSE Russell’s emerging market indices, but analysts said that effect had faded in recent weeks.

Saudi Basic Industries (SABIC), the kingdom’s biggest petrochemicals firm, was down 2.4% after it said it had curtailed feedback supplies by about 49% following the attacks. Aramco has agreed to buy a 70% stake in SABIC from the state Public Investment Fund in a $69.1 billion deal that is awaiting regulatory approvals. Other petrochemical companies such as Yanbu National Petrochemicals Co and Kayan also announced significant reductions in feedstock supplies…

Saudi Aramco eyes joint venture deal in India by next year, says CEO Nasser

Like other major oil producers, Aramco wants to tap rising demand growth opportunities and invest in the world's third-biggest consumer

Oil giant Saudi Aramco, which has launched a new Indian venture in Gurgaon, is in talks with several Indian refiners and hopes to land a joint venture deal by next year, the company's chief executive told Reuters on Sunday.

Aramco, like other major oil producers, wants to tap rising demand growth opportunities and invest in the world's third-biggest consumer. "We are hoping to land on a JV sometime," Aramco's CEO Amin Nasser said at India Energy Forum by Cera Week in New Delhi.

Petroleum Minister Dharmendra Pradhan, who jointly inaugurated the local unit with Aramco Chief Executive Amin Nasser, said the setting up of the Gurgaon unit would help pave the way for "a strategic partnership in the hydrocarbon sector" between the two nations.

Asked if a deal could be finalised next year, Nasser said: "We hope so. We are in serious discussions."

Aramco wants to buy a stake in the planned 1.2 million barrels per day (bpd) refinery in India's west coast, India's oil minister said in June.

The world's biggest oil producer is investing in refineries abroad to help lock in demand for its crude and expand its market share ahead of its initial public offering next year.

Aramco plans to float up to 5 percent of its shares in 2018 in what could be the world's largest IPO, raising as much as $100 billion.

Nasser said Aramco is interested in investing in India's downstream sector - refining, petrochemicals and fuel retailing including lubricants.

Saudi Arabia is competing with Iraq to be India's top oil supplier, with Iraq displacing it for a fifth month in a row in August, data compiled by Reuters showed.

Earlier this year Saudi Arabia pledged billions of dollars of investment in projects in Indonesia and Malaysia to ensure long-term oil supply deals.

The International Energy Agency estimates India's refining capacity will lag fuel demand going forward, requiring investment in new plants.

Saudi Aramco earlier on Sunday launched a new office in New Delhi as it aims to expands its presence in India....READ MORE