NEW DELHI (Arab News) — India’s Reliance Industries’ deal to sell a 20% stake in its oil to chemicals business to Saudi Aramco will reap major dividends for both companies, analysts said.

Under the terms of the non-binding deal announced earlier this week, the conglomerate will get roughly $15 bln for the 20% stake, money that it will use to pare its massive debt load. Reliance has an overall debt of nearly $42 bln including $20 bln at its fibre division which the group is currently in talks to sell. In exchange, Reliance will buy up to 500,000 barrels a day of crude oil from Aramco, more than double its current purchase. Historically Reliance has bought oil from Iran and Venezuela, both of which are under US sanctions.

The Aramco deal is the latest in a series of moves by Reliance to sell non-core assets or establish joint ventures to reduce debt. Speaking to shareholders, Ambani said the group will become a zero net debt company within 18 months.

The deal will cover all of Reliance’s refining and petrochemicals assets, including 51% of its petroleum retail joint venture.

This is not Aramco’s first investment in India. In 2017 it opened an office in the Indian capital to expand the company’s international portfolio in this growth region. Last year it announced a joint venture with a consortium of Indian state-owned refiners to set up a $44 bln refinery and a petrochemical project on the country’s western coast. The proposed refinery, which is yet to take off, is expected to have a total capacity of 18 mln tons a year and will process up to 1.2 mln barrels of crude oil a day as well as refined petroleum products including petrol and diesel. The proposed project has been billed as among the world’s largest refining and petrochemicals projects and one that has been designed to meet India’s fast-growing demand for fuels and petrochemicals.