The Kingdom of Saudi Arabia is set to invest in India’s downstream oil and gas projects as part of a strategic partnership between both countries. The move will also enable the Kingdom to establish a stable outlet for its crude.
Oil giant Saudi Aramco and Abu Dhabi National Oil Company signed a preliminary agreement with Indian state-run companies for a 50 percent stake in a planned 1.2 million barrels per day (bpd) mega refinery. The refinery is situated on India’s west coast.
According to local media reports, the Indian government is also planning to sell its entire 53.29 percent stake in state-run refinery Bharat Petroleum. The estimated price of the stake sale is $10 billion.
India’s Prime Minister Narendra Modi in an interview, told the media that, “From a purely buyer-seller relationship, we are now moving towards a closer strategic partnership that will include Saudi investments in downstream oil and gas projects.”
Aramco is also planning to buy a 20 percent stake in Reliance Industries in a million dollar deal. Reliance Industries is one of India’s petrochemical and refining businesses. India will also sign energy deals in the Kingdom in addition to its plan to participate in the country’s strategic petroleum reserve.
An agreement was signed between Indian Strategic Petroleum Reserves and Saudi Aramco to lease part of the 2.5 million-tonne Padur storage in Karnataka. Modi also said that India and the Kingdom’s relationship is transitioning from a buyer-seller to a strategic partnership that will include downstream oil and gas project investments.