New Delhi — Saudi Arabia was not bothered by "short-term fluctuations" in its shareof crude oil supplies to India, the world's third largest importer, and waslooking to take on new joint venture refinery projects in the country, energyminister Khalid al-Falih said Saturday.
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"We are not bothered by short-term fluctuations of volumes. We've seenrefiners react to buy opportunities that they get from time to time. But atthe end of the day we know from eight decades of supplying the world withenergy that our partners will find the value in long-term stability," Falihtold reporters in the Indian capital New Delhi.
Long India's top crude oil supplier, Saudi Arabia lost its top spot lastyear to Iraq, and has seen its export numbers fall. India is set to import36.5 million mt from the kingdom in the current fiscal year to March, down7.6% from 39.5 million mt last year, according to the Indian petroleumministry.
This is from total imports of 214 million mt, meeting 80% of its crudeoil needs.
"For us we feel quite comfortable, quite at home in India doing business,and again that goes back to the relationship between the two people beforeeven the modern Saudi Arabia and India were created as nation states," headded.
Falih was in India, the main driver of global oil demand growth in 2017,on a two-day visit to discuss increased Saudi involvement in the Indian energysector. This includes an invitation by the petroleum ministry to participatein its Strategic Petroleum Reserve program.
India has become Saudi Arabia's priority destination for investment, withSaudi Aramco CEO Amin Nasser saying in October that it was keen to play abigger role as a crude and LPG supplier to feed an anticipated rise in demand.The company forecasts Indian crude oil demand could nearly double to 10million b/d by 2040 while its gas demand would also more than triple.
MAHARASHTRA REFINERY STAKE
State energy giant Aramco also hopes to take part in a number of majorrefining projects with Indian oil companies. This includes plans byIndian Oil Corp., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp.Ltd. to build a new 60 million mt/year (1.2 million b/d) grassroots refineryin Maharashtra state on India's western coast.
"The more the better," Falih said when asked how much stake Aramco waslooking to acquire in the project. "But certainly we are not constrained bycapital, and we are not constrained by feedstock, and we are not constrainedby size", he said.
"Aramco probably is the only company in the world that can do so manythings at the same time and can bring all the ingredients for success fromtechnical knowledge to commercial to feedstock to global logistics, of coursefinancing and then offtake and marketing to the netback to the JV a verystable and profitable future. We want to bring that to India," he added.
The refinery is expected to start up around 2020-21. It would be Aramco'sfirst foray into India's refining sector. It already has joint ventures in theUS, South Korea, Japan, China and Indonesia. It also has plans for furtherprojects in China and Malaysia, and wants to eventually raise its totaldownstream capacity to 8 million-10 million b/d from around 5.4 million b/dcurrently.
Falih also said Aramco was "in principle" interested in entering India'sfuel retail business, but would not provide details of any discussions on thematter. "I will leave that to Aramco downstream organizations to look at," hesaid.
--Ratnajyoti Dutta, firstname.lastname@example.org
--Adal Mirza, email@example.com
--Edited by Irene Tang, firstname.lastname@example.org