Oil giant Saudi Aramco has reportedly expressed interest in investing in India, as part of its expansion strategy.
According to an Indian media report, Aramco chairman Khalid Al Falih revealed the largest global oil company’s plans to Indian Prime Minister Narendra Modi, during the latter’s two-day visit to Riyadh that ended yesterday.
‘Minister Al Falih to PM: @Saudi_Aramco looks to India as its No. 1 target for investment’, Vikas Swarup, spokesperson for India’s foreign ministry (known in the country as Ministry of External Affairs) tweeted, after the meeting between Modi and Al Falih, who is also the Kingdom’s Health Minister.
Aramco’s CEO Amin H. Nasser last month disclosed that the company is considering building a refinery in India as part of its plans to increase its footprint in Asia and almost double its global refining capacity.
The company, which already owns stakes in foreign companies, including in a refinery in China’s Fujian province along with Exxon Mobil Corp. and China Petroleum & Chemical Corp, is reported to be planning to establish a $2tn sovereign wealth fund by selling a stake of less than 5% in the company.
Saudi Aramco’s move to invest in India – which is being increasingly seen by major oil producing countries of the GCC as a growing refining and oil storage hub – comes after the UAE made a recent commitment to store crude oil in India’s storage facilities.
The UAE’s state-owned Abu Dhabi National Oil Company (ADNOC) has also reportedly offered two-thirds of the stored oil to India for free.
India is making strategic moves to turn the low oil price situation in its favour by deepening its diplomatic alliances with the Gulf nations; a move that will help the Asian giant secure its energy future.
India heavily depends on the GCC for oil and gas and imports about 80% of its oil from the region; a figure that is expected to surge to 90% in the coming years, according to an ex-Indian envoy to the UAE, Saudi Arabia and Qatar.
India is building underground storage facilities at Visakhapatnam in Andhra Pradesh state, and Mangalore and Padur in Karnataka state, with a capacity to store about 5.33mn tonnes of crude oil.
Gulf oil producers are believed to be eyeing India’s storage units to guard against global price shocks and supply disruptions.
