The world’s largest oil exporter Saudi Aramco and Abu Dhabi National Oil Company agreed to invest in the $44-billion petrochemical refinery complex at Ratnagiri, Maharashtra in what will likely be the largest overseas investment in the sector.
“We’ll commence initial investment as soon as land acquisition issues are resolved,” said Amin H Nasser, chief executive officer of Saudi Aramco. “The project will catalyse future collaboration not just in energy but in variety of fields.”
“The significance goes beyond the foreign direct investment,” said Petroleum and Natural Gas Minister Dharmendra Pradhan at the memorandum signing ceremony in New Delhi. “The MoU strengthens the strategic partnership between India, Saudi Arabia and the UAE and brings together crude supply, resource, technology, experience and expertise of these multiple oil companies with an established commercial regime.”
“With oil demand set to almost double to 10 million barrels per day by 2040, India’s access to adequate affordable oil has never been more important,” said Nasser. “We will support our investment with a large core integrated oil business in India. That will cover the entire value chain and partnerships with local companies ”
The refinery project will have an output of 60 million metric tonnes per annum and its first phase is expected to start operations in 2022. Three state-run oil firms—Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd.—will jointly own 50 percent stake, while Aramco and ADNOC will own 25 percent stake each. It will produce environment-friendly fuels of Euro 6 grade and above.
‘Will Look Into Stakeholders’ Opinion’
The project is facing a backlash from people in the Konkan region — it’s proposed site — who claim that it will destroy highly productive mango and cashew orchards. “We’ll look into the problems of farmers and address all their issues. We’ll take all the stakeholders’ opinion before starting work,” Pradhan said.
Pradhan said the Organisation of Petroleum Exporting Countries’ decision to increase oil output by 1 million barrels per day will help India. “We are happy that they have considered our (India’s) expectations.”
(Corrects an earlier version that mis-stated Aramco and ADNOC’s investment)