NEW DELHI :
India and Saudi Arabia are graduating from a purely oil buyer-seller relationship to one of closer strategic partnership with the West Asian nation investing in downstream oil and gas projects in India, Prime Minister Narendra Modi has said in an interview given to Arab News newspaper published on Tuesday.
The Prime Minister said that India imports around 18% of its crude oil from the Saudi Arabia, making it the second-largest source of crude oil for India. India imports about 80% of its crude oil requirement and has been making diplomatic efforts to secure more sources of energy at stable prices, while promoting electric mobility at home. Greater economic interlinkage between India and its key supplier of oil is expected to benefit business partners in both the countries. For Saudi Arabia, investments into India’s downstream oil and gas industry will enable it to diversify its energy assets.
Saudi Arabia’s national oil company Saudi Aramco along with United Arab Emirates’ national oil company ADNOC has inked a deal with state-run companies in India for a 50% stake in a planned 1.2 million barrels per day refinery in India’s west coast. In August, Reliance Industries had announced that it has agreed with Saudi Aramco to a non-binding Letter of Intent for an investment in RIL’s oil to chemicals division comprising the refining, petrochemicals and fuels marketing business. Saudi Aramco’s potential 20% stake was based upon an enterprise value of $ 75 billion for the said business division, RIL had said.
“From a purely buyer-seller relationship, we are now moving toward a closer strategic partnership that will include Saudi investments in downstream oil and gas projects… Saudi Aramco is participating in a major refinery and petrochemical project on India’s west coast. We are also looking forward to the participation of Aramco in India’s Strategic Petroleum Reserves," Arab News said quoting Modi in the interview.
During Modi’s visit, several business partnership deals between the nations are being explored. India wants investments in its downstream energy assets as well as in upstream oil and gas exploration, in addition to other large infrastructure projects as New Delhi is trying to boost economic growth rate and add more jobs.
Modi said in the interview that one of the major areas of cooperation between India and Saudi Arabia is in investments in India’s infrastructure projects. Saudi Arabia had earlier expressed intent to invest about $100 billion in India in sectors including petrochemicals, infrastructure and mining. “We welcome greater Saudi investments in our infrastructure projects, including in the smart cities program. We also welcome Saudi interest in investing in the National Investment and Infrastructure Fund," Arab News said quoting Modi.