In a major boost to the economic reforms launched by Narendra Modi government, world’s largest oil producer, Saudi Aramco, signed a memorandum of understanding (MoU) with Indian oil companies to be a part of $44 billion investment in West Coast refinery and petrochemical project called Ratnagiri Refinery and Petrochemicals. It is one of the largest investments made by any foreign oil producer in India. The agreement is being facilitated by three state-run oil marketing companies — Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The investment made by the world’s largest producer of oil may help oil companies in increasing their margins.
What does it mean for India
The upcoming refinery is anticipated to produce nearly 18 million tonnes of petrochemical products annually. The refinery will process 1.2 million barrels of crude oil each day. “Large as this project may be, it does not by itself satisfy our desire to invest in India… We see India as a priority for investments and for our crude supplies,” Saudi energy minister Khalid al-Falih said.
More investments likely
The company will supply nearly 50 percent of the crude that will be processed at the planned refinery. A partner will be included in the share in the refinery later. The project is anticipated to be ready by 2025. The pre-feasibility study of the refinery has been completed and the project’s final configurations are being finalised.
Modi’s economic reforms helped in attracting investments
The economic reforms initiated by the Modi government are in the right direction and Saudi Aramco is looking to bring in more investment in the country, Amin H Nasser, President and CEO, Saudi Aramco told CNBC TV18 yesterday. Saudi Aramco and a consortium of Indian state refiners namely Indian Oil, Hindustan Petroleum and Bharat Oil agreed to create a mega refinery and petrochemical project on India’s west coast in Maharashtra on Wednesday.