Saudi Aramco, the Saudi Arabian state-owned oil giant and one of the world’s largest corporate entities, is preparing to make a significant investment in Southern India, marking another major step in its long-term India strategy.
According to reports, Saudi Aramco is set to acquire a 20 per cent stake in a new refinery project being developed by state-owned fuel retailer Bharat Petroleum Corporation Limited (BPCL). The investment is estimated at around Rs 20,000 crore. In addition, Oil India Limited and a consortium of banks have also expressed interest in participating in the project.
BPCL is developing a large refinery-cum-petrochemical complex near Ramayyapatnam port in Nellore district of Andhra Pradesh. The base investment for the project is estimated at around Rs 96,000 crore, though overall construction costs are expected to cross Rs 1 lakh crore. While neither Saudi Aramco nor BPCL has issued an official confirmation, media reports indicate that the Andhra Pradesh government has already handed over nearly 6,000 acres of land for the project. The refinery is being set up with the twin objective of meeting India’s growing domestic fuel demand and expanding exports of petrochemical products. The proposed facility will have a processing capacity of 9 to 12 million tonnes per annum. As per reports, Oil India will hold a 10 per cent stake in the project, while banks are expected to own around 4–5 per cent. BPCL is reportedly planning to divest a total of 30–40 per cent stake to strategic and financial investors.
Reports further suggest that Saudi Aramco is also exploring an investment in a new refinery project being developed by Oil and Natural Gas Corporation (ONGC) in Gujarat. This forms part of Aramco’s broader investment roadmap in India. In 2019, the Saudi energy major had announced plans to invest up to $100 billion (approximately Rs 8.9 lakh crore) in India over multiple phases.
Prime Minister Narendra Modi, during his visit to Saudi Arabia in April last year, had held discussions related to strengthening energy cooperation and investments. Saudi Aramco has been a key crude oil supplier to India for decades, and its advanced refining technologies are expected to provide significant technological and operational benefits to Indian partners.
BPCL is currently India’s second-largest oil marketing company, with a market share of 27.44 per cent based on last financial year figures. The company reported a profit of Rs 6,443 crore in the second quarter ended September. BPCL operates three major refineries at Kochi, Mumbai and Bina in Madhya Pradesh.
