India, one of the fastest growing consumers of petroleum products in the world, has attracted the interest of oil-rich countries UAE and Saudi Arabia.
In a sign of deepening energy ties, India, one of the fastest growing consumers of petroleum products in the world, has attracted the interest of oil-rich countries UAE and Saudi Arabia. While the UAE’s Abu Dhabi National Oil Company (ADNOC) on Monday signed a memorandum of understanding with Saudi Arabian Oil Company (Saudi Aramco) to acquire a stake in India’s $44-billion West Coast refinery, both companies are also looking to invest in the entire value chain, including fuel retailing, here. At the same time, Indian oil companies as a consortium will be bidding for hydrocarbon fields in UAE.
“It is a vision of the government that to fulfil our long-term energy security needs, just a buyer-seller relationship is not adequate and the engagements should be at various levels,” petroleum minister Dharmendra Pradhan told reporters.
Saudi Aramco in April 2018 had taken 50% stake in the West Coast refinery, also known as Ratnagiri Refinery and Petrochemicals, from the Indian consortium of oil marketing companies (OMCs) — Indian Oil, BPCL and HPCL. At that time it was announced that Aramco will bring in a partner later. Aramco will now share an undisclosed stake with ADNOC. “The share of both the companies is being discussed,” said Amin H Nasser, CEO and president of Saudi Aramco.
The Aramco and ADNOC investment will be the highest for the country in the sector.
Apart from investing in the refinery, Aramco’s Nasser said that the company is also looking at fuel retailing in India. “We are looking at all options including partnering with ADNOC or Indian OMCs to explore opportunities in the retailing sector,” he added.
Pradhan said both Aramco and ADNOC are open to India’s downstream market. “They are talking to various stakeholders, government companies and the private sector apart from making their own assessments,” he added.
Extending its presence in the strategic oil reserves of India, ADNOC has shown interest in the Padur reserve and may replicate the model it has for Mangaluru. The first consignment of 2 million barrels of crude oil from ADNOC for the Mangaluru facility arrived last month. The UAE firm will be filling one of the two caverns at the facility with crude oil which will be used by India during an emergency.
Pradhan said Indian oil companies will also be looking to invest in upstream sector of UAE. “In the next bidding rounds, consortium of Indian oil firms with companies such as Mubadala Petroleum will bid in the next round as well,” added Pradhan. Mubadala Petroleum is a fully owned subsidiary of Mubadala Investment Company, which is owned by the government of Abu Dhabi.