Reliance Industries Limited (RIL) chairman Mukesh Ambani on Wednesday announced that the company will spin off its oil-to-chemical (O2C) business into a separate subsidiary by early 2021 after receiving regulatory approvals. Ambani said the company will approach the NCLT (National Company Law Tribunal) with a proposal to split the O2C segment to facilitate new partnership opportunities.

"We expect to complete this process by early 2021," said Ambani while addressing shareholders during the Reliance Annual General Meeting (AGM).

Reliance Industries chairman said they are now working to complete contours of a $15 billion strategic partnership with Saudi Aramco. In the last year's AGM, Ambani had announced talks for sale of 20 per cent stake in the O2C business, which comprises its twin oil refineries at Jamnagar in Gujarat and petrochemical assets, to the world's largest oil exporter. The deal was to be concluded by March 2020 but has been delayed due to coronavirus pandemic.

"Reliance is working to complete the contours of a strategic partnership with Saudi Aramco. The partnership gives our refineries access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for a higher oil-to-chemicals conversion," Ambani said.

He said that the deal has not progressed as per the original timeline due to unforeseen circumstances in the energy market and the COVID-19 situation.

Ambani said that Reliance has been approached by various global companies for strategic partnerships in its petrochemical business, and making the O2C a separate entity will serve the purpose. The potential partnerships will help the oil and gas major to build a competitive manufacturing capacity at its existing sites to serve the deficit Indian market that still depends on large-scale imports of chemicals.

"With this we will have an integrated and competitive Oil to Chemicals portfolio which is valuable to global companies as it provides access to the large and growing Indian market," he said.

In the fuel retail business, Reliance has formed 51:49 joint venture with BP plc of the UK for retail service station network and aviation fuel business in India, he said.

Besides refineries and petrochemical plants, the O2C business also comprises 51 per cent stake in the fuel retailing business. It, however, does not include the upstream oil- and gas-producing assets such as the flagging KG-D6 block in the Bay of Bengal.

By Chitranjan Kumar