BIG move Modi govt as India inks major deal with Saudi Arabia worth Rs…, trouble for Pakistan due to…
India-Saudi Arabia relations: In a major jolt to Islamabad amid the ongoing threat of an India-Pakistan war, New Delhi is building closer ties with Muslim powers, with Saudi Arabia recently inking a deal to build two oil refineries in India. According to reports, each of the two refineries will have an annual capacity of around 9 million tonnes, and Aramco– Saudi Arabia’s state-owned oil and natural gas firm– may spend Rs 18,000 crore to acquire a 26% equity stake in the joint venture.
The deal came through following the recent meeting of Prime Minister Narendra Modi and Saudi Crown Prince Mohammed bin Salman in Jeddah during the former’s official state visit to the oil-rich Kingdom.
According to experts, Saudi Arabia’s decision to build refineries in India, and work with Indian companies has major implications, especially in the context of Pakistan, as the deal would bolster India’s geopolitical strength, apart from boosting the country’s energy security. Saudi Arabia and the rest of the Arab world, issued a strong condemnation of the barbaric Pakistan-sponsored Pahalgam terror attack.
BPCL, ONGC to partner with Saudi Aramco
In October last year, media reports had said that India’s Bharat Petroleum Corporation (BPCL) and Oil and Natural Gas Corporation (ONGC) were in talks with Saudi’s Aramco to partner in separate refinery projects. The Saudi company is eyeing a 26 percent stake in both refinery projects.
As per reports, BPCL is preparing a report for its refinery-cum-petrochemical factory in Andhra Pradesh, which would have an annual capacity of 9-12 million tonnes, and will be built at a cost of around Rs 95,000 crore. BPCL and its partner would have to invest Rs 33,000 crore in equity, with Aramco likely to spend Rs 9,000 crore for a 26% equity stake in the project.
A similar deal with ONGC may require Aramco to invest around Rs 18,000 crore, but the Saudi-owned has put forth the condition that the refinery will get a major chunk of its crude oil supply from Aramco. Indian partners have declined this condition.
Citing sources, media reports said the Indian companies might agree to buying a significant share of Aramco crude oil if the Riyadh-owned firm offers concessions such as discounts on price and freight, or a 90-day credit period. ONGC is offering a 20-49% stake in the project, but Aramco wants to limit its stake to 26% or less.
While the exact location and construction cost have not been decided yet, ONGC is considering building a 9 mtpa or larger refinery-cum-petrochemical complex in Uttar Pradesh, reports said, adding that the firm is eyeing a land parcel near Prayagraj which BPCL had acquired a decade ago for a now-shelved refinery project.
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