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Wednesday, Dec 08, 2021

Saudi Aramco eyes tie-ups across energy value chain

Saudi Aramco eyes tie-ups across energy value chain

Our goal is to build a chemicals biz that is a global leader on a par with our leading position in oil, the company said
Saudi Arabian Oil Co. plans to partner Indian companies as part of its strategy to invest across the energy ecosystem in the country, a senior executive at the world’s biggest oil producer said on Thursday. “Our vision is to invest across the value chain in India, and partner with Indian companies in this endeavour," Saudi Aramco’s senior vice-president (downstream) Mohammed Y. Qahtani said.

He was speaking at the CERAWeek 5th India Energy Forum, according to a statement from Aramco.

“As you know, Aramco is significantly strengthening its downstream business, to better complement our long-standing pre-eminence in upstream. And chemicals, especially, offer us a strategic opportunity," he said.

This comes in the backdrop of Reliance Industries Ltd announcing plans in June to formalize its partnership with Aramco by the end of 2021.

India, the world’s third largest oil importer, is pushing the Opec+ grouping dominated by Saudi Arabia to boost oil production and help reduce spiraling domestic fuel prices. With the Opec cartel accounting for a majority of India’s crude oil imports and around 40% of global production, any increase in production will help soothe global oil markets.

Amin Nasser, Aramco’s president and chief executive, was part of the virtual meeting that Prime Minister Narendra Modi held with the senior executives of global oil firms on Wednesday.

“Our goal is to build a chemicals business that is a global leader, on par with our leading position in oil. Our acquisition of a 70% stake in SABIC has been key... allowing us to offer one-stop integrated solutions from crude oil supplies, refined products and chemicals, to lubricants and advanced non-metallic materials," Qahtani said.

Aramco has also partnered with Indian state-run oil firms for setting up the world’s largest oil refinery and petrochemical complex in Ratnagiri, Maharashtra. The project is facing delays following protests from farmers and Shiv Sena, which is in power in the state with its alliance partners.

The mega refinery is part of India’s plans to grow its refining capacity to 400 million tonnes per annum (mtpa) by 2025 from the present 249.36 mtpa through 23 refineries. Instead of building the controversial ₹3 trillion Ratnagiri Refinery and Petrochemicals Ltd at a single location in Maharashtra, the government is now exploring a plan to set up multiple small-size refineries and is looking at locations in Gujarat, Karnataka, Maharashtra and Andhra Pradesh as reported by Mint earlier.

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