You are here: Home » PTI Stories » National » News
Business Standard

Saudi Aramco picks up 50% stake in Maharashtra refinery

Press Trust of India  |  New Delhi 

Saudi Aramco, the world's largest producer, today signed an agreement to pick up 50 per cent stake in a planned USD 44-billion refinery-cum-petrochemical project in Maharashtra, a move that will give it an assured customer for additional 30 million tonnes of its

Aramco, at a later date, plans to dilute some of its 50 per cent equity stake in the 60 million tonne-a-year refinery project in favour of another strategic investor, visiting Saudi Minister told reporters here.

The Saudi national oil company will supply half of the required for processing at the refinery, he said.

State-owned refiners (IOC), Corp Ltd (HPCL) and Corp Ltd (BPCL) will own the remaining 50 per cent stake.

"As large as this project may be, this does not by itself satisfy our desire to invest in will not stop discussing other opportunities because we see as a priority destination for our investment and supplies," he said.

Like other major producers, is looking to lock in customers in the world's third-largest through the investment. UAE and too are looking at investing in projects in return for getting an assured offtake of their

Last year, invested in refinery projects in and that came with

was the biggest to till 2016-17 fiscal year, but slipped behind last fiscal. It had supplied 39.5 million tonnes of crude oil to India in 2016-17, ahead of 37.5 million tonnes by

But in the first 11 months of 2017-18 fiscal, Saudi supplies at 33.9 million tonnes lagged behind Iraqi exports of 42.4 million tonnes to India.

"We have always said that India is going to get priority in terms of supply of crude oil and certainly that assurance is only going to be increased with this massive investment on the ground," Al-Falih said, adding that was keen to supply not just oil but petrochemical and fertilisers to India as well.

He said is also keen on venturing into fuel retailing.

"The project is designed as 50:50 (joint venture between Indian and foreign companies). There is a domestic block by three Indian companies (holding 50 per cent). We are managing the international block," he said.

"will initially assume 50 per cent, but we have the option of introducing another international partner if it is in the interest of the project. There is one international company which has already expressed interest and we have taken note of it and in due course we will address it," he added.

signed a memorandum of understanding (MoU) with & Petrochemicals, a consortium consisting of IOC, HPCL and BPCL. Currently, IOC holds 50 per cent stake in RRPL, while HPCL and BPCL have 25 per cent stake each. After Aramco's entry, the 50 per cent stake will be split in same proportion between IOC, HPCL and BPCL.

Besides Saudi Aramco, (Adnoc) has also shown interest in taking a stake in the project.

The refinery-cum-petrochemical complex is expected to be commissioned by 2022.

"is the only company that can undertake project of this scale. 1.2 million barrels per annum (60 million tonnes per annum) has never been undertaken at one time," he said, adding that the company had in the 1990s looked at investing in projects in India along with but they couldnt take off due to "political and legal issues".

On retailing, he said Saudi Aramco is "very much interested" as it does not want to remain just a manufacturing company.

"Retail is very important. We are in the business of providing fuel, energy, petrochemicals right to final consumer level. Saudi Aramco does not want to be a manufacturing company only. We want to be in every neighbourhood, every city, providing solutions," he said.

Asked what took Saudi Aramco so long to invest in India, he said, "We never looked away from India."

"The reforms that has brought over the last few years are nothing but a game changer. An opening (up of economy) we have never seen before, the transparency, ease of doing business, removing some of the hurdles" has facilitated investment flow, he said.

Saudi Aramco had previously been interested in new greenfield refineries set up in India but none of the interests materialised in investments.

The world's biggest was interested in the 9 million tonnes but exited the project in 1998. Thereafter, the refinery was set up by HPCL in joint venture with Lakshmi N Mittal.

Saudi Aramco had also initially shown interest in IOC's 15 million-tonne in Odisha but walked out of the project in 2006. The (IOC) set up the refinery on its own thereafter.

India has a refining capacity of 232.066 million tonnes, which exceeded the demand of 194.2 million tonnes in 2016-17 fiscal.

According to the International Agency (EA), this demand is expected to reach 458 million tonnes by 2040.

IOC has 11 refineries with a total capacity of 81.2 MT while BPCL has four refineries with a total capacity of 33.4 has three refineries with a total capacity of 24.8 MT.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 13:45 IST