NEW DELHI: In a mega deal that will see the largest inflow of foreign investment in the Indian refining sector, two gulf-based oil giants have agreed to collectively take 50 per cent stake in the Ratnagiri Refinery that is planned to come on stream by 2025.
Abu Dhabi National Oil Company (ADNOC) on Monday signed a Memorandum of Understanding (MoU) with Saudi Aramco to pick up a stake in the planned $44 billion refinery-cum-petrochemical project in Ratnagiri.
“Saudi Aramco and ADNOC will together hold 50 per cent stake. The terms are being discussed,” Aramco CEO Amin Nasser said, without giving much detail on the split of stake between the two firms.
In April, Saudi Aramco had signed an agreement to take up to 50 per cent stake in the Ratnagiri refinery project and had stated that in future it will dilute some of its equity stake in the refinery. The current agreement is part of its strategy.
State-owned refiners Indian Oil, Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) will own the remaining 50 per cent stake.
According to the April agreement, Aramco will supply half of the crude oil required for processing at the Ratnagiri refinery that will be capable of processing 1.2 million barrels of crude oil per day. ADNOC will now supply some of the crude to be processed at the unit.
“The investment by Saudi ARAMCO and ADNOC in the $ 44 billion project will be the highest ever overseas investment in the Indian refining sector. The significance, however, goes much beyond FDI. It is a strategic partnership between India, Saudi Arabia and the UAE which is symbolised by the MoU,” Petroleum Minister Dharmendra Pradhan said.
He added that the strategic partnership brings together crude supply, resources, technologies, experience and expertise of these multiple oil companies with an established commercial presence around the world.
However, Aramco’s ambition is not limited to have a stake in the refinery but to venture in the fuel marketing space.
The company said that it wants to be present in the entire value chain of India’s energy sector and fuel marketing is one of them.Nasser said that the company is looking at all options to enter fuel retailing through partnerships with Indian oil companies.