NEW DELHI: will buy 50% stake in a $44-billion refinery project being promoted by a consortium of Indian state-run oil refiner-marketers, a move that sharpens focus on the investment potential presented by India's growing appetite for energy and provides the world's biggest oil producer an assured market in the world's fastest-growing large economy. The two sides signed an MoU here to this effect on Wednesday on the sidelines of the 16th International Energy Forum ministerial round as oil minister Dharmendra Pradhan and his Saudi counterpart Khalid Al-Falih looked on. While investment details are not yet clear, the deal once completed will compete with Russian major Rosneft's $10-billion acquisition of Essar group's refinery and BP's $7 billion deal for stake in Reliance Industries Ltd's upstream assets for the biggest foreign investment slot in Indian oil sector. According to the understanding reached with the consortium of IndianOil Corporation, Hindustan Petroleum and Bharat Petroleum, Saudi Aramco will be free to induct another strategic partner in the project by offloading part of its holding at a later stage. As a partner, Saudi Aramco will supply half, or 30 million tonne, of crude to the refinery being built in Maharashtra's coastal district of Ratnagiri. But there is no full stop yet in India for Saudi Aramco as it is "very much interested" in entering the fuel retailing business here and scout for other investment opportunities. This clearly reinforces the India growth story and the positive impact of the Narendra Modi government's oil sector reforms on global investors. "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 haves facilitated investment flow," Falih told reporters. "As large as this project may be, this does not by itself satisfy our desire to invest in India. Aramco will not stop discussing other opportunities because we see India as a priority destination for our investment and energy supplies... "Retail is very important. We are in the business of providing fuel, energy, petrochemicals right to final consumer level. Saudi Aramco does not want to be a manufacturing company only. We want to be in every neighbourhood, every city, providing energy solutions," he said. Saudi Arabia, known as the swingmaker in Opec -- the grouping of oil exporting countries accounting for roughly 40% of global supplies -- till some time back but is today jostling for market share with US shale industry and non-Opec players such as Russia as well as fellow Opec members Iran and Iraq. For India too, Saudi Arabia was the biggest source of crude till 2016-17 (April-March) till it lost that position to Iraq in 2017-18. In 2016-17, India bought 39.5 million tonne of Saudi oil against 37.5 million tonnes from Iraq. But in the first 11 months of 2017-18, Saudi supplies at 33.9 million tonnes have lagged Iraqi exports of 42.4 million tonnes. India's expanding economy and a burgeoning middle class driving automobile sales makes it an attractive market for oil producers. In 2016, the country beat Japan as the world's third-largest oil consumer after the US and China. Both International Energy Agency and Opec have projected India to be the main driver of incremental global oil demand over the next decade or more. Saudi Aramco is investing in projects around the world to tie in customers for oil and integrate its petrochemicals business in major markets. It has signed such deals with US and French companies earlier this month -- essentially in the petrochemicals sector -- and refinery projects in Indonesia and Malaysia last year.
Saudi Aramco has agreed to take a 50 % stake in a $ 44bn oil ##field and petrochemicals project in India , which is being promoted by a consortium of BP , Hindustan Petroleum and Bharat Petroleum . The two sides signed a medium of understanding ( MOU ) on 11 July . Under the terms of the agreement Saudi Aramco can bring another partner into the project at a later stage through selling part of its stake . Aramco will supply 30 million tonnes of crude to the integrated refinery , which will be built near the port of Ratnagiri in western India .