The world’s largest oil exporter, Saudi Aramco, on Wednesday said it was in talks with Mukesh Ambani-led Reliance Industries (RIL) and other companies to invest in India’s petrochemical and oil refinery sectors.
This is in addition to the $44-billion Ratnagiri refinery in Maharashtra, for which Saudi Aramco and UAE’s Adnoc are partnering with Indian oil marketing companies (OMC) such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.
Top RIL executives met the Saudi delegation on Wednesday, said a person privy to the development.
The Saudi Arabian General Investment Authority (SAGIA) signed four investment agreements worth more than $28 million and 11 memorandums of understanding (MOUs) with Indian companies including Tata Consultancy and Glemark. As part of its 2030 vision document, Saudi Arabia is offering investment opportunities worth $453 billion as part of its National Industrial Development and Logistics Program (NIDLP). The programme presents opportunities in mining, industry, logistics, and energy.
Saudi Aramco’s Chief Executive Officer Amin Nasser told reporters on the sidelines of Saudi-India Forum meeting in New Delhi that his company is in talks with RIL and others to increase the investment in India. He also expected hope that the Ratnagiri refinery project will meet its deadline of 2025 for completion, despite land acquisition issues.
The Ratnagiri refinery that would be put by a company which would have 50 per cent ownership of Indian government-owned refiners has run into problems with Maharashtra chief minister Devendra Fadnavis announcing relocation of the site. B Ashok, chief executive officer, Ratnagiri Refinery and Petrochemicals (RRPL), however, appeared confident of sticking to the 2025 commissioning of the project.
“We have asked the state government for 15,000 acres and in coastal area,” said Ashok when asked about the alternate locations.
Nasser said his company was “not limited to investment in Ratnagiri” and was looking at other opportunities too.
“We are looking at additional investment in India. We are in talks with other companies, including Reliance Industries,’ he said.
Saudi Oil Minister Khalid al-Falih and RIL Chairman Mukesh Ambani last year in a meeting discussed opportunities for joint investment and cooperation in petrochemical, refining and communication projects. RIL operates two refineries at Jamnagar with a combined annual capacity of 68.2 million tonne. It is also the largest telecommunication service provider in India.
Both Falih and Nasser are part of a business delegation accompanying Saudi Arabia’s Crown Prince Mohammed bin Salman, who is in India for a one-day visit. Falih said, “We are not just marketers and sellers, but investors too. We want to increase our share of investment in India. It is our number one priority for investment outside Saudi Arabia.” He added that Saudi Aramco wants to be a household name in India through its tie-ups.
Addressing the summit, Nasser added that India is expected to have a huge oil demand rise by 2040. “From 4.8 million barrels a day now, India’s oil demand is expected to increase to 8.2 million barrels per day by 2040,” he said.
Highlighting India’s prospects, he added India is going to be the second largest economy by 2050, surpassing the United States. “By 2050, India will represent 15 per cent of the global domestic product and economic power will be shifting from West to East,” Nasser added. At present, India buys nearly 800,000 barrels a day from Saudi Arabia.
Nasser said there was going to be huge demand for petrochemicals in India, as per capita petrochemical consumption was 9 kg currently, compared to 109 kg of that of the US.
Talking about electric vehicles and the scope for alternate energy, Nasser added the transition to electric vehicles will be a small process and that is the reason why Saudi, that is sitting on 260 billion barrels of oil reserves, is focussing continuously on exploration activities.
Saudi Aramco, in the past, had also expressed its interest in fuel retail segment in India, once the Ratnagiri refinery is in place. India at present has a refining capacity of around 248 MT.
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