New Delhi (Sputnik) — Ushering in a new era of energy cooperation, UAE's state-owned oil giant ADNOC has entered into an agreement with Saudi Aramco under which both firms will together command a 50 percent stake in India's $44 billion Ratnagiri Refinery and Petrochemicals Complex. The remaining half will be split among India's state-owned Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL).
The project, expected to start operating in 2022, will be one of the world's biggest refineries with a crude processing capacity of 1.2 million barrels per day. The refinery will also provide feedstock for the integrated petrochemicals complex, which will have the capacity of producing approximately 18 million tons per annum of petrochemical products.
"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 [foreign direct investment]. It is a strategic partnership between India, Saudi Arabia and the UAE, which is symbolized by the MoU," Dharmendra Pradhan, India's minister of oil and natural gas said during the signing ceremony held in New Delhi on Monday.
The Indian government expects to tap the resources, technologies, experience and expertise of these foreign oil companies, which have an established commercial presence around the world.
"For both Saudi Arabia and UAE, strategic business investment with the world's fastest-growing oil consumer has reached an irresistible tipping point," Amin H Nasser, the CEO and president of Saudi Aramco, said.
Saudi Aramco has also indicated that the company would further expand its oil businesses in India.
"Saudi Aramco is determined to go a step further. We will support our investment with a large fully-integrated oil business in India that will cover the entire value chain in partnership with local companies who know their markets best," the company's CEO said after signing the agreement.
India has a refining capacity of 232.066 million tons, which exceeded its demand of 194.2 million tonnes in 2016-17. According to the International Energy Agency (IEA), this demand is expected to reach 458 million tons by 2040.