WPB: Saudi Arabia’s state-owned oil company, Aramco, is in talks to invest in two planned refinery projects in India, according to multiple informed Indian sources.
India, the world’s third-largest oil consumer and importer, aims to become a global oil refining hub as Western companies reduce crude refining capacity in the transition to cleaner fuels. Meanwhile, Aramco—the world’s largest oil exporter—is looking for stable crude oil sales markets in this growing market.
At the same time, Saudi Arabia’s share of India’s oil imports has declined as Indian refineries, which have invested billions of dollars in upgrading their facilities, have diversified their crude oil supply sources and turned to cheaper alternatives, including Russian oil.
According to sources, Aramco is separately negotiating investments in Bharat Petroleum Corporation’s planned refinery in the southern state of Andhra Pradesh and a proposed refinery by India’s state-controlled Oil and Natural Gas Corporation (ONGC) in the western state of Gujarat.
While ONGC’s Gujarat refinery project is still in its early stages, Bharat Petroleum’s chairman stated in December that the company plans to invest $11 billion in the Andhra Pradesh refinery and petrochemical project.
Two refinery sources separately confirmed that these projects will proceed regardless of Aramco’s investment. One of them noted, “Everything depends on the proposal Aramco puts forward.”
According to informed sources, Aramco has proposed supplying crude oil equivalent to three times its stake in each project and intends to either sell its share of production in India or export it.
A second refinery source said, “We want flexibility in crude purchases. If we give them a 30% stake, they’ll want to supply 90% of the refinery’s crude capacity, which isn’t feasible.”
Details on the potential investment amount and the configuration of the planned refineries are currently unavailable.
A third source familiar with the matter stated that Indian Prime Minister Narendra Modi plans to visit Saudi Arabia in the second quarter of this year, and both countries are working to reach an agreement before the visit.
Aramco has long sought to expand its refining presence in India. In 2018, the company joined a consortium of Indian firms to build a 1.2 million-barrel-per-day refinery and petrochemical complex in western India. In 2019, it signed a non-binding agreement to acquire a 20% stake in Reliance Industries. However, the massive refinery project was delayed due to land acquisition issues, and the deal with Reliance was canceled due to valuation disagreements.
According to a Reuters report, Indian Oil Minister Hardeep Singh Puri stated in January that India is planning to launch three refineries, each with a capacity of 400,000 barrels per day.
By WPB
Oil, Bitumen, Refinary
If the Canadian federal government enforces stringent regulations on emissions starting in 2030, the Canadian petroleum and gas industry could lose $ ...
Following the expiration of the general U.S. license for operations in Venezuela's petroleum industry, up to 50 license applications have been submit ...
Saudi Arabia is planning a multi-billion dollar sale of shares in the state-owned giant Aramco.
