IPO-bound Saudi Aramco says committed to invest $35 bn in India refinery project
05 November 2019
State-owned Saudi Aramco, the world’s largest oil company, on Monday said it is remains committed to investing $35 billion in India’s west coast refinery that is set to be constructed in Maharashtra’s Raigad district.
This could be the largest ever foreign direct investment in India, the Dhamam-based company said. However, India is yet to find land for $60-bn oil refinery to be built by Aramco, ADNOC and Indian partners, the company added.
Saudi Aramco, which is gearing up to list its shares in the Riyadh stock exchange, said it is committed to investing $35 billion in India’s west coast refinery.
The company along with UAE’s Abu Dhabi National Oil Company (ADNOC) will hold a 50 per cent stake in the project while its Indian partners willhold the remaining equity stake.
The joint venture project will see a consortium of Indian state-run oil companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited - pooling in the remaining 50 per cent
Aramco will also take part in India’s Strategic Petroleum Reserves (SPR) where crude inventories are being stored in underground caverns constructed on the eastern and western coasts – in Visakhapatnam, Mangalore and Padur.
The Kingdom has shown interest in developing the Padur SPR, with Saudi Aramco planning to keep 4.6 million barrels there.
The SPRs can hold up to 37 million barrels of oil. India is the third largest consumer of energy and also the third largest importer of crude oil in the world. It is also important to note that demand for petroleum products has been increasing at a CAGR of 5.5 per cent between 2013 and 2017.
Saudi Aramco also said supply of crude oil to international clients, including India, is going steady despite attacks on its two processing facilities in September this year.
Two of Saudi Aramco’s facilities — at Abqaiq and Khurais — were attacked on 14 September by missiles and drones. While the Kingdom had blamed Iran for the attacks, Tehran has denied any involvement in them.
Aramco said production at Khurais had resumed within 24 hours of the attack, while work began in Abqaiq before the end of September. The company also confirmed that full production capacity has been restored at Abqaiq and Khurais.
Khurais and Abqaiq together produces 6.2 million barrels of crude oil a day.
State-run Saudi Aramco, the world’s largest integrated oil and gas company, on Monday announced its intention to proceed with an initial public offer on the Main Market of Tadawul.