Page 40 - Plastics News April 2019

Business news

ONGC proposes to invest Rs 5,150 Saudi Aramco to acquire 70

crore in Tamil Nadu percent majority stake in SABIC

n a major development, Vedanta Limited and ONGC audi Arabia has signed a share purchase agreement
Ihave proposed to drill 341 wells to hunt for hydrocarbon Sto acquire a 70 percent stake in Saudi Basic
reserves in and around Tamil Nadu (offshore and onshore) Industries Corp. (SABIC) from the Public Investment
according to a report in the New Indian Express Large Fund (PIF) of Saudi Arabia. The private transaction is
tracts of lands in the Cauvery delta region is likely to valued at SAR 259.125 billion (or SAR 123.39 per share),
which is equivalent to $69.1 billion. The remaining
30 percent of publicly traded shares in SABIC are
not part of the transaction, and Saudi Aramco says it
has no plans to acquire these remaining shares. The
transaction is subject to certain closing conditions,
including regulatory approvals. Headquartered in
Riyadh, SABIC has global operations in more than 50
countries with 34,000 employees. In 2018, SABIC’s
consolidated production volume across its various
business units was 75 million metric tons. The company
recorded net income of $5.7 billion, annual sales of
$45 billion and total assets of $85 billion.H.E. Yasir
come under the pump if the proposals are approved. In the Othman Al-Rumayyan, managing director, PIF of Saudi
last two months, four sets of separate applications have Arabia, says, “This is a win-win-win transaction and a
been filed with the Union Environment Ministry, seeking transformational deal for three of Saudi Arabia’s most
Terms of Reference (ToR) for conducting Environment important economic entities.
Impact Assessment (EIA) studies. Of the 341 wells, 67 It will unlock significant capital for PIF’s continued long-
are proposed by public sector oil major ONGC while the term investment strategy, underpinning sectoral and
remaining 274 are by Cairn Oil and Gas, a vertical of revenue diversification for Saudi Arabia. Furthermore,
Vedanta. The environment ministry has also been swift it will introduce a strategic owner that can add
in granting approvals for ONGC. considerable value to SABIC and all its shareholders
while capitalizing on SABIC’s strong capabilities to
An application for onshore development and production
of oil and gas from 27 wells in two fields (Bhuvanagiri
& Periyakudi fields) and expansion in Cauvery Basin (in
Cuddalore and Tiruvarur districts) was submitted by
ONGC on February 27 and ToR was granted by March 31.
ONGC proposes to invest Rs 5,150 crore in the project. A
total of 40 wells are proposed to be drilled in this block,
of which 35 wells will be located in Cuddalore and five
in Nagapattinam. As per ONGC officials estimate, 1.82
hectares per well is to be acquired on short term lease/
rent. As per records available with Express, Vedanta has unlock the opportunities for growth that Saudi Aramco,
sought an exemption from holding public hearings. The a key player in energy markets around the world, can
hearings, where general public are allowed to express offer.” Amin Nasser, president and CEO of Saudi Aramco,
their views on such projects, is a statutory requirement adds, “This transaction is a major step in accelerating
under EIA Notification, 2006. The company is planning to Saudi Aramco’s transformative downstream growth
invest a whopping Rs 13,538 crore in the project.Last year, strategy of integrated refining and petrochemicals.
Vedanta was allotted two hydrocarbon blocks in Tamil SABIC is a world-class company with an outstanding
Nadu as part of Open Acreage Licensing Policy (OALP). workforce and chemicals capabilities.

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