After Saudi Aramco, Abu Dhabi National Oil Company will pick up stake in a planned $44 billion refinery-cum-petrochemical project in Maharashtra. An initial agreement for ADNOC taking stake is slated to be signed in UAE on Sunday, official sources said.
Saudi Aramco, the world’s largest oil producer, had signed an agreement to take up 50 percent stake in the Ratnagiri refinery project, last month.
Aramco had stated that it will dilute some of its 50 percent equity stake, at a later date, in the 60 million tonne-a-year refinery project in favour of another strategic investor. Now, the Saudi national oil company is diluting some of that stake to ADNOC, they said.
UAE Minister and ADNOC Group CEO Sultan Al Jaber, Aramco CEO Amin H Nasser and Indian Oil Minister Dharmendra Pradhan will be present at the agreement signing in UAE on Sunday.
As per the April agreement, Aramco is to supply half of the crude oil required for processing at the refinery that will be commissioned by 2025.
Like other major producers, Aramco and ADNOC are looking to lock in customers in the world’s third-largest oil consumer through the investment. Kuwait too is looking to invest in projects in return for getting an assured offtake of their crude oil.
Last year, Saudi Arabia invested in refinery projects in Indonesia and Malaysia that came with long-term crude oil supply deals.
However, in the first 11 months of 2017-18 fiscal, Saudi supplies of 33.9 million tonnes, lagged behind Iraqi exports of 42.4 million tonnes to India. UAE supplies a small quantity of oil to India as well.
Aramco is also keen on venturing into fuel retailing in India as the country 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 Energy Agency, 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 MT. HPCL has three refineries with a total capacity of 24.8 MT.