Saudi Aramco seeks to take its India play beyond the $44 billion Ratnagiri refinery project, which will now be relocated
Saudi Aramco’s interest is driven by India’s energy demand, which is expected to grow at 4.2% over the next 25 years
New Delhi: The world’s biggest oil producer, Saudi Arabian Oil Co. (Saudi Aramco) is in talks with Mukesh Ambani-controlled Reliance Industries Ltd (RIL), and others, for more projects in India, its chief executive said Wednesday.
“We are looking at additional investment in India. So we are in discussions with other companies as well, including Reliance," Amin H. Nasser, president and chief executive officer of Saudi Aramco, said on Wednesday.
However, on Monday, the BJP-led Maharashtra government said it has decided to relocate the $44 billion project, after protests from farmers and ally Shiv Sena.
Saudi Aramco’s interest is driven by India’s energy demand, which is expected to grow at 4.2% over the next 25 years. Saudi Arabia is a crucial source of energy for India and is home to a large number of expatriate Indians.
“We want Saudi Aramco and Sabic to be household names (in India)," Saudi Arabia’s energy minister Khalid Al-Falih said at a panel discussion in New Delhi on Wednesday. Other opportunities are also being looked at, he said.
Saudi Aramco plans to enter fuel retailing in India and, apart from investing in the Ratnagiri refinery project, will also supply crude oil. This is expected to ensure supply security.
India has been seeking Saudi investment in its infrastructure sector. Mint had on 14 June reported that the public investment fund (PIF) of Saudi Arabia, which has invested in SoftBank Group Corp.’s Vision Fund and ride-hailing firm Uber Technologies Inc., looking to invest in India’s infrastructure sector.
“We are not limited to that investment, which is the mega refinery...we are looking at other opportunities," Nasser said. “There is a new India and a new Saudi Arabia," said Majid Al Qasabi, Saudi Arabia’s commerce and investment minister.
Saudi Aramco’s India play has been in the works for some time now and follows Prime Minister Narendra Modi’s visit to the Gulf kingdom in 2016. It marks a reset in the global energy architecture, where buyers are at the centre of oil majors’ future growth plans. India is the world’s third-largest energy consumer after the US and China.
“One investment—no matter how big—is not enough," Falih said. “India is our number one priority for investment outside the Kingdom of Saudi Arabia," he said.
The promoters of the Ratnagiri refinery project include Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL).
Abu Dhabi National Oil Co. (Adnoc), the state-run oil firm of the United Arab Emirates, has picked up a part of Saudi Aramco's stake in the $44 billion refinery.
An RIL spokesperson, meanwhile, did not respond to phone calls and text messages for comment on the matter.
Given the opposition towards the Ratnagiri refinery, a high-level committee of experts was set up to draw a roadmap for settlement of land acquisition issues. The project was earlier proposed to be set up over 5,461 hectares in Ratnagiri and Sindhudurg districts of the Konkan. The Shiv Sena has claimed that the project would adversely affect cashew and mango farming in the Konkan and disturb natural habitat.
“One important thing happening between Saudi Arabia and India is the growing trust that will form the bedrock of investment," said Niti Aayog vice-chairman Rajiv Kumar, who was speaking at the same panel discussion.