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India urges Saudi Arabia to ensure steady crude, LPG supplies despite output cuts

New Delhi — India has urged Saudi Arabia to play an active role in keeping oil prices at a reasonable level, and has also asked the kingdom to ensure steady supplies of crude oil and LPG to the country, an Indian government statement said.

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The statement was issued after Saudi energy minister Khalid al-Falih held a meeting with Indian petroleum minister Dharmendra Pradan in New Delhi over the weekend.

"During the meeting, Pradhan referred to Saudi Arabia's pre-eminent role as a leading producer of crude oil in the world, and in maintaining global oil market balance. He raised concerns about the increasing trend in global crude oil prices."

"He also pointed to the need for uninterrupted supplies of crude oil and LPG to India in view of the OPEC and non-OPEC production cuts," the statement said.

"Both ministers also discussed about the possible adverse impact of recent geopolitical developments on the global oil market."

Pradhan said in a tweet after the meeting with Falih: "Shared my concern on the rising oil prices and sought active role to be played by Saudi Arabia for keeping oil prices at a reasonable level."

REFINING PROJECT

One of the biggest downstream projects planned in India is the Ratnagiri refinery, a mega refinery and petrochemicals complex on the western coast, with a planned capacity of 60 million mt/year (1.2 million b/d).

It is being jointly built by state-run refiners Indian Oil Corp., Hindustan Petroleum Corp. and Bharat Petroleum Corp. Saudi Aramco and ADNOC have signed an initial agreement to jointly take a stake in that project.

Some analysts have said the project could face delays as the land acquisition process had not been completed yet.

The Indian government statement said that Pradhan and Falih agreed to expedite work on the project in India's western coast. The project, estimated to cost $44 billion, is expected to be the largest greenfield refinery in the world.

"Saudi Arabia's participation in the Indian Strategic Petroleum Reserve (SPR) Program was also discussed," the statement added.

In 2017-2018 (April-March), India's crude imports from Saudi Arabia was 36.8 million mt (739,000 b/d), accounting for 16.7% of the country's total imports, the statement said.

Falih's visit was a follow-up meeting after the high-profile Saudi delegation visit to India in February, led by Saudi Crown Prince Mohammed bin Salman.

During the February visit, Falih had said that Saudi Arabia was looking to strengthen its oil ties with India, which had emerged as its "No. 1 priority for investment" outside the kingdom. A similar sentiment was echoed by Saudi Aramco CEO Amin Nasser, who said the company is looking for additional opportunities in India's oil sector where it expects demand growth to remain robust in the coming years.

The kingdom has pledged to invest $100 billion in India, with the bulk of funds going toward infrastructure and energy sectors, including downstream segments like refining and petrochemicals.

Both ministers agreed to take concrete steps for early implementation of the decisions taken in the oil and gas sector during the visit of Mohammed bin Salman, the statement said.

-- Ratnajyoti Dutta, newsdesk@spglobal.com

-- Sambit Mohanty, newsdesk@spglobal.com

-- Edited by Geetha Narayanasamy, newsdesk@spglobal.com