Saudi Arabia will invest US$100 billion in India’s infrastructure and energy industry as it seeks to strengthen its position in the country that is registering the fastest growth in oil demand.
“We want Saudi Aramco to be a household name in India,” Energy Minister Khalid al-Falih said as quoted by S&P Global Platts, adding that India was the number-one priority for the Kingdom’s oil giant.
Saudi Arabia has already committed hefty investments in India, the biggest among them the US$44-billion refinery and petrochemical complex in Ratnagiri, which will be the largest in the country, with a capacity of 60 million tons annually. Aramco is participating in the project together with Emirati Adnoc, sharing a 50-percent stake in the project. The other 50 percent are divided between three Indian refiners: Indian Oil Corp., Hindustan Petroleum Corp., and Bharat Petroleum Corp.
The project is behind schedule, however, because the partners behind it had to pick a new location after strong opposition from farmers in the original one. Because of the delay, construction work will begin in 2021 and the facility should be operational by 2025, the chief executive of the company set up for the project told Bloomberg this week.
“We are not limited to that investment, which is the mega refinery,” Aramco’s chief executive Amin Nasser told S&P Global Platts. “We are looking at other opportunities. India is an investment priority for Saudi Aramco. There is a lot of growth potential. We are in discussions with other companies as well, including Reliance Industries.”
India is a focal point for oil producers. Last year, its demand for the commodity went up by 245,000 bpd, accounting for 14 percent of global oil demand growth. This year, according to Wood Mackenzie, growth will continue strong. Over the longer term, according to OPEC estimates, oil demand in India will rise by 5.8 million bpd until 2040.