The Changing Oil Landscape: Saudi Aramco Invests $44 Billion in India, Will Build Mega Refinery in Ratnagiri

The world’s biggest oil company, Saudi Aramco, announced a $44-billion deal to build a giant refinery complex in India with three Indian oil majors. The announcement was made public on Wednesday.

The refinery at Ratnagiri in Maharashtra will be handling up to 1.2 million barrels of oil a day, the Saudi company said in a statement after signing a memorandum of understanding with Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

The project “will rank among the largest world refining and petrochemicals projects,” the Saudi company said.

Saudi Aramco and the Indian consortium will each own 50 percent of the project, India’s energy minister Dharmendra Pradhan said in a statement.

“Investing in India is a key part of our company’s global downstream strategy, and another milestone in our growing relationship with India,” said Saudi Aramco president Amin Nasser. Mr Nasser was quoted on The Economic Times.

“The signing marks a significant development in India’s oil and gas sector, enabling a strategic joint venture and investment partnership that will serve India’s fast-growing demand for transportation fuels and chemical products,” the minister said.

“Participating in this mega project will allow Saudi Aramco to go beyond our crude oil supplier role to a fully integrated position that may help usher in other areas of collaboration, such as refining, marketing, and petrochemicals for India’s future energy demands,” said Nasser.

The deal comes less than 24 hours after Saudi Aramco signed an agreement with French oil company Total to build a “giant” petrochemical complex in Saudi Arabia for about $5 billion. The project is expected to create around 8,000 new jobs in the kingdom.