Thu, Apr 12, 2018 - Page 10 News List

India laments rising oil as Saudi Aramco eyes refiner


Oil’s rally to US$70 per barrel is threatening to clip India’s economic wings at a time when Saudi Arabia is looking to join a US$30 billion refinery project in the world’s fastest-growing market.

The South Asian nation wants to see prices at about US$50 per barrel in order to manage its finances better, Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan said in an interview.

Meanwhile, Saudi Arabia — which is said to be aiming for oil near US$80 to pay for its own crowded policy agenda — is planning to sign a deal to participate in a refinery on India’s west coast as part of its strategy to secure sources of consumption for its crude.

While Indian Prime Minister Narendra Modi’s administration reaped the benefits of the biggest price crash in a generation during its first term in power, oil is recovering as the government gears up for elections next year.

Saudi Arabia, the world’s biggest crude exporter, is preparing for an initial public offering of its state-run producer and leading efforts by OPEC to curb output and eliminate a global glut that spurred oil’s decline.

“We are a very price-sensitive consumer,” Pradhan said on Tuesday. “From Indian consumers’ point of view, I will be more than happy if the price is around US$50 a barrel.”


Saudi Arabian Oil Co, commonly known as Saudi Aramco, has agreed in principle to join a proposed 1.2 million barrel per day refiner on India’s west coast, he added.

Saudi Aramco CEO Amin Nasser was yesterday to sign a memorandum of understanding for the project with Ratnagiri Refinery and Petrochemicals Ltd, a consortium consisting of state-run refiners Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd, said a person familiar with the matter, who asked not to be identified before an official announcement.

Saudi Aramco might take a 50 percent equity stake in the project and can bring in another strategic investor, the person said.

Nobody immediately replied to an e-mail seeking comment sent to Saudi Aramco’s media office outside of regular business hours.

“Things are on the table, we are discussing with each other,” Pradhan said, referring to Saudi Arabian participation in the project.

“It has to be a win-win situation for both. It must be acceptable to them, it must be profitable for me also,” he added.

Pradhan yesterday confirmed that a preliminary deal would be signed with Saudi Aramco.


Saudi Arabia has been edged out as the top oil supplier to India amid an intensifying race among producers to retain their most prized markets.

India, which imports about 80 percent of its crude requirements, has been diversifying its sources of oil supply and is seeking more favorable terms from producers in the Middle East.

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