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World’s largest oil producer Saudi Aramco is keen on venturing into fuel retailing in India, but it will only do so after the planned USD 44 billion refinery-cum-petrochemical complex in Maharashtra is ready to function. The company has signed an agreement to pick up 50 per cent stake in the refinery project.
Amin Nasser, CEO of Saudi Aramco, signed a memorandum of understanding (MoU) with Ratnagiri Refinery & Petrochemicals, a consortium consisting of Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). Currently, IOCL holds 50 per cent stake in RRPL, while HPCL and BPCL have 25 per cent stake each. After Aramco's entry, the 50 per cent stake will be split in same proportion between IOCL, HPCL and BPCL.
After signing the MoU, the CEO in an interview with The Economic Times, said they were not getting into retail without having a manufacturing hub.
The company is also planning to pick a local partner for the retail venture to dilute some of its 50 per cent equity stake in the 60 million tonne-a-year refinery project. The partner will have its own brand in fuel retailing. Saudi Aramco would also like to have its own brand, said Nasser.
Talking about the investment decision in India, Nasser said "Saudi Aramco is the only company that can undertake project of this scale. Around 1.2 million barrels per annum (60 million tonnes per annum) has never been undertaken at one time," he said, adding that the company had in the 1990s looked at investing in projects in India along with Royal Dutch Shell but they could not take off due to "political and legal issues".
He gave the credit of this investment in India to Prime Minister Narendra Modi-led government. "The reforms that Prime Minister Narendra Modi has brought over the last few years are nothing but a game-changer. An opening (up of economy) we have never seen before, the transparency, ease of doing business, removing some of the hurdles" has facilitated investment flow, he said.
(With inputs from PTI)
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