Aramco may buy refinery stake in India, says report
26 April 2016
Saudi Aramco is considering proposals to buy stakes in oil refining and petrochemical projects in India, a Reuters report on Monday quoted union minister for petroleum and natural gas Dharmendra Pradhan as saying.
The report comes amidst other reports to the effect that Saudi Arabia is likely to sell a 5-per cent stake in its oil refinery Aramco and India could be looking for a stake in Aramco.
India, the world's third-biggest oil consumer, imports more than 70 per cent of its crude oil requirements, mostly from the Middle East, while Saudi Arabia as the world's biggest oil exporter is seeking outlets for its oil.
Saudi Arabia was also India's biggest source for oil, sending about 889,000 barrel per day (bpd), or about 21 per cent of the country's total crude imports in the January-March 2016 quarter.
India, meanwhile, is seeking funds for the expansion programme of the Bina refinery and a 1.2-million bpd refinery and petrochemical plant at Dahej. Pradhan had, earlier this month, met with Saudi Aramco chairman Khalid al-Falih and sought Saudi investment in the west coast refinery projects.
"All the three we have offered to Saudi. The two sides will decide on the proposals in a time-bound manner," Reuters quoted Pradhan as saying.
State-run oil refiners, Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp, plan to build a 1.2-million bpd refinery on the country's west coast, investing more than Rs1,00,000 crore ($15.02 billion).
Bharat Oman Refineries Ltd is expanding the capacity of the Bina refinery in Central India by 30 per cent to 156,000 bpd while OPAL, majority owned by Oil and Natural Gas Ltd (ONGC), is building a petrochemical plant in Gujarat.
Saudi Aramco chief executive Amin Nasser last month said his company is looking to expand its downstream investments in China, Malaysia, India, Vietnam and Indonesia.
Investment by Aramco in its markets will help guarantee demand for its crude oil while at the same time ensuring supplies in consumer markets.
India is the best bet for Aramco as the country is expected to be the major driver of world energy demand growth in the years to come with its oil consumption rising by 6 million bpd to about 10 million bpd by 2040, according to the International Energy Agency.
India had, earlier this month, signed a framework agreement for investment promotion cooperation between Invest India and Saudi Arabian General Investment Authority earlier this month, minister of state in the ministry of commerce and industry Nirmala Sitharaman informed the Lok Sabha in a written reply on Monday.
Saudi Arabia has identified infrastructure, energy, manufacturing, transport, education and healthcare as key sectors of investment in India.
India, on its part, is looking for investments in areas such as information and communication technology (ICT), energy, chemicals, construction, food processing, machinery, healthcare and life sciences, transport and logistics, human capital and tourism.
The framework agreement is aimed at facilitating investments by private sector in the two countries. Invest India will provide all handholding and investment facilitation to Saudi Arabian investors planning to invest in India.