Saudi Aramco will stay committed to the mega Ratnagiri refinery project despite its interest in Reliance Industries’ refining and petrochemicals business where it is reportedly eyeing a 25 per cent stake.
Aramco, along with its West Asia counterpart, Adnoc (Abu Dhabi National Oil Company), will jointly hold 50 per cent in the Ratnagiri refinery where the other stakeholders are IndianOil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
“Aramco’s keenness to invest in Reliance Industries’ refining business has been doing the rounds for a while now and will not impact its plans for Ratnagiri,” said a top industry source. The West Asia oil company is apparently bullish on India and this explains why it is open to the idea of taking stakes in more than one project.
Even in the “extremely unlikely” event of Aramco choosing to exit Ratnagiri, experts say Adnoc can comfortably buy out its stake and end up being the single largest shareholder with 50 per cent. Either ways, they add, there are other global oil giants such as Shell and Exxon Mobil, which would be ready to throw their hats into the ring.
“India is a big energy market and companies are confident of improving business prospects here,” said the source. This explains why Rosneft of Russia has taken over Essar Oil’s refining and marketing business in India with big plans to increase its presence here.
Likewise, Kuwait Petroleum Corporation is reportedly open to picking up a stake in the BPCL-promoted Bina refinery in Madhya Pradesh even while existing ally, Oman Oil, is as upbeat about participating in the expansion plans.
If the Aramco deal with Reliance eventually materialises, it will have access to a readymade refinery and supporting infrastructure at the downstream level. On the other hand, the 60-million-tonne Ratnagiri project is at least four years away from commissioning.
It has had its share of delays starting with the original location at Nanar being shelved. It now looks as if Raigad district in Maharashtra will become a viable alternative though a clearer picture will emerge only after the Lok Sabha election results in end-May.
The refinery will be commissioned in two phases of 40 mt and 20 mt each. Its commissioning will also coincide with a new era of clean fuels in India with Bharat Stage VI emission norms due to come into force from April 2020. It is also very likely that cleaner petrol and diesel will dominate the script for a large part of the following decade even while electric mobility is being touted as the best bet going forward.