New Delhi, June 30: Saudi Aramco, a global leader in oil production, could buy a 25 per cent stake in Essar Oil at an estimated market value of $5.5 billion, according to industry officials.

The Ruia family-controlled Essar Oil has already entered into a deal to sell a 49 per cent stake in the company to Russia's Rosneft.

The deal with Rosneft is likely to conclude next month. The sale of the 25 per cent stake is expected by August, officials said.

The twin selloffs - 74 per cent of Essar Oil equity - will help bring the group's debt down by half to about Rs 46,000 crore from Rs 88,000 crore.

The promoters expect an enterprise value of $10 billion for Essar Oil.

Essar Group is selling its assets after earnings were hurt by a fall in commodity prices, weak demand and lower capacity utilisation at its units.

Saudi Aramco is moving beyond the production and export of crude and expanding into the processing and sale of oil products, which can fetch higher prices in markets globally.

The promoters delisted the company in December, paying the minority shareholders a record Rs 3,347 crore. The delisting had valued the company at Rs 38,000 crore.

Rosneft route

A preliminary deal for the sale of 49 per cent in Essar Oil to Rosneft was signed between the companies in July 2015. In March 2016, they signed a non-binding agreement. No valuation was provided for the deal at that time.

Rosneft, the world's top listed oil producer, will get a hold in India's second biggest oil refinery as well as its 2,400 petrol pumps that will more than double to 5,000 in two years.

The Russian company will also supply 10 million tonnes a year of crude to Essar Oil's 20 mt-per-annum Vadinar refinery in Gujarat for 10 years. The deal, however, does not include Essar Oil's five CBM blocks, which hold up to 10 trillion cubic feet of gas resource.

Rosneft is majority owned by the Russian government, with BP Plc holding less than a 20 per cent stake and public shareholding at around 10 per cent. The Rosneft deal is the biggest private sector investment from Russia in India.

A group of Indian state-owned oil companies including ONGC Videsh Ltd, Oil India Ltd and Indian Oil Corp are investing $5-6 billion in taking a substantial stake in two oilfields operated by Rosneft in Russia.