According to Aramco’s IPO prospectus, the company will concentrate its downstream investments in China, India, and Southeast Asia, which are all experiencing rapid growth.
The RIL O2C stake purchase has been postponed due to a drop in oil prices and Aramco’s US$75 billion annual dividend pledge, in our opinion. Recently, the company reaffirmed its commitment to downstream investments in India and China. By investing in RIL’s O2C sector, it could replicate its downstream investment model in China. Lower leverage and a lower carbon footprint will support RIL. Reiterate that RIL is a purchase.
Lower leverage and a lower carbon footprint will support RIL.
The RIL O2C stake purchase has been postponed due to a drop in oil prices and Aramco’s US$75 billion annual dividend pledge, in our opinion. Recently, the company reaffirmed its commitment to downstream investments in India and China. By investing in RIL’s O2C sector, it could replicate its downstream investment model in China. Lowering the RIL’s costs will be beneficial.
Expansion in India: According to Aramco’s IPO prospectus, the firm aims to concentrate its downstream investments in China, India, and Southeast Asia. The CEO recently reaffirmed the company’s commitment to India: Though low oil prices forced short-term changes, CEO Amin Nasser said in a Dec. 20 interview that they are continuing to explore opportunities in India and China’s high-growth markets.
Existing presence in China: Aramco owns a stake in China’s largest O2C project in Zhejiang, where it has a long-term crude supply agreement and plans to develop a retail outlet network..An investment in RIL’s O2C subsidiary could provide Aramco with a similar footprint in India, including a stake in India’s largest O2C project, a long-term crude supply agreement, and participation in fuel retailing through the RIL-BPJV. Since it did not pursue green-field O2C potential in China, and no other Indian player is contemplating a move to O2C, an investment in RI makes sense.s.It also has a 1,000-retailer fuel retailing joint venture with Sinopec.
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