The world’s largest oil producer, Saudi Aramco, signed a deal with India on Wednesday on the sidelines of the International Energy Forum (IEF) conference to pick up a 50 per cent stake in the Rs 3-trillion west coast refinery and petrochemicals project in Maharashtra.
Expressing an interest in foraying into the petroleum retail
business in India, the company signed a memorandum of understanding with the country’s three major oil- marketing firms — Indian Oil Corporation (IOC), Bharat Petroleum (BPC) and Hindustan Petroleum Corporation (HPC) — to build the proposed Ratnagiri Refinery and Petrochemicals (RRPCL) in Maharashtra.
Kuwait Petroleum Corporation is also in talks with another refinery and petrochemical plant to buy a stake. Saudi Arabia
and Kuwait are two major crude oil
suppliers to India.
Kuwait, which was the third-largest crude oil
supplier to India in 2013-14, has steadily slipped from its position over the years. It supplied 10.2 million tonnes (mt) in the first 10 months of 2017-18, according to the data provided to Parliament. Kuwait had in 2014-15 supplied 17.9 mt, which came down to 11 mt in 2015-16 and 9.8 mt in 2016-17.
has traditionally been India’s largest oil supplier, but in the April-January period in 2016-17, Iraq replaced it, supplying 38.9 mt, Minister of Petroleum and Natural Gas Dharmendra Pradhan said last month in reply to a question in Parliament.
The 60-mt RRPCL is likely to be ready by 2025 and, at a later stage of development, Aramco
will rope in other foreign partners such as Abu Dhabi National Oil
Company (Adnoc), which have shown an interest in this regard. “There will be two blocs of investors — one comprising Indian companies and the another consisting of foreign firms. Later, we can bring in other interested parties as part of the foreign bloc,” said Khalid A Al-Falih, minister of energy and mineral resources of Saudi Arabia.
Falih said his company would supply at least 50 per cent of the crude oil
required for the refinery and provide advanced technologies for the same. The processing capacity of the refinery, will be 1.2 million barrels of crude oil
per day and it will produce approximately 18 mt of petrochemicals per year.
Falih said the entry of Saudi Aramco
would bring down the cost of financing because of the company’s high credit ratings. The company is also planning to foray into the country’s petrochemical and retail sectors, he said.
To this, Pradhan said the Centre would look into the regulatory aspects in the sectors. Existing regulations require a threshold investment of at least Rs 20 billion in the oil and natural gas sector or an equivalent bank bond undertaking.
President and Chief Executive Officer Amin H Nasser
said the project would elevate the former’s role from being a crude oil
supplier to being a fully integrated player.
The refinery was originally planned at two locations in Ratnagiri, with the main complex on 14,000 acres in Babulwadi and a 1,000-acre storage and port facility about 15 km away.
On the ongoing protests in the region against land acquisition for the project, Nasser said he was confident that local partners would sort out the issue soon.
On the other hand, Kuwait Petroleum Corporation’s move to buy stake in a refinery-cum-petrochemical project is likely to increase the country’s supplies to India by at least 200,000 barrels per day (bpd).
“There will be an announcement in one or two weeks in this regard,” said Nabil Bourisli, chief executive officer of Kuwait Petroleum International (KPI).