March 27, 2025 [Market Screener]- Saudi Aramco is in talks to invest in two planned refineries in India as the world’s top oil exporter looks for a stable outlet for its crude in the world’s fastest-growing emerging market, several Indian sources with direct knowledge of the matter said.
India, the world’s third-biggest oil consumer and importer, wants to become a global refining hub as Western companies cut crude processing capacity in their shift to cleaner fuels.
Meanwhile, Saudi Arabia’s share of India’s oil imports has declined as refiners that have invested billions of dollars in upgrading their plants diversify crude sources to tap cheaper alternatives, including from Russia.
Aramco is in separate talks to invest in Bharat Petroleum Corp’s (BPCL) planned refinery in the southern state of Andhra Pradesh and a proposed Oil and Natural Gas Corp (ONGC) refinery in western Gujarat state, the sources said.
Aramco, BPCL and ONGC did not immediately respond to requests for comment.
Both Indian firms are state-controlled.
While ONGC’s Gujarat refinery plans are at a nascent stage, BPCL’s chairman said in December that it aimed to invest $11 billion in its Andhra Pradesh refinery and petrochemical project.
Two refinery sources said separately that the projects would proceed regardless of whether Aramco invests.
“It all depends on the proposal that Aramco gives,” one of them said.
Sources said state-controlled Aramco proposes to supply oil equivalent to three times its stake in each project, and wants to sell its share of production either in India or by export.
“We want flexibility in crude procurement. If we give them 30% stake, they want to supply crude equivalent to 90% of the capacity, which is not possible,” the second refinery source said.
Other details, including potential investment size and the configuration of the planned refineries, were not immediately available.
Indian Prime Minister Narendra Modi plans to visit Saudi Arabia in the second quarter, and the two countries will attempt to reach an agreement before the visit, said a third source with knowledge of the matter.
India’s foreign ministry did not respond to a request for comment.
Aramco has long been scouting for refining opportunities in India.
In 2018 it joined a consortium of Indian companies to build a 1.2 million barrels per day refinery and petrochemical project in western India and in 2019 it signed a non-binding agreement for a 20% stake in Reliance Industries’ oil to chemical business.
However, the huge refinery project has been delayed by difficulties over procuring land and the deal with Reliance was called off due to differences over valuation.
In January, Indian Oil Minister Hardeep Singh Puri said India would look to set up three refineries of 400,000 bpd each. (Reporting by Nidhi Verma. Additional reporting by Shivam Patel in New Delhi and Yousef Saba in Dubai. Editing by Mark Potter)
