World’s largest oil exporter Saudi Arabia and richest Indian Mukesh Ambani-run Reliance Industries are discussing joint investment in petrochemicals and refinery projects, the Saudi Oil Minister Khalid al-Falih said.
Al-Falih, who has known Ambani for over a decade now, travelled to Udaipur earlier this month to attend the pre-wedding festivities of Ambani’s daughter Isha’s marriage with Ajay Piramal’s son Anand.
During that visit, he also held talks with Ambani but choose to tweet about those discussions only this week.
In an Arabic tweet, which was translated using online tools, Al-Falih said he was delighted to meet Ambani.
At the meeting “we discussed opportunities for joint investments and cooperation in petrochemical, refining and communications projects.”
He also tweeted a picture of the meeting where Ambani is dressed in a business suit, a sharp contrast to other pictures of his in traditional attire during the pre-wedding festivities held on December 8 and 9.
No details of the meeting were available from Reliance.
Reliance operates two refineries at Jamnagar with a total capacity of 68.2 million tonnes per annum.
Reliance plans to expand its only-for-exports SEZ refining capacity to just over 41 million tonnes from current 35.2 million tonnes but does not have any plans to set up a new refinery in the country.
It is presently focused on expanding petrochemical and telecom business, industry sources said.
Crude oil is the basic raw material for the manufacturing of petrochemicals.
Saudi Arabia, on the other hand, is keen to get a foothold in the world’s fastest-growing fuel market so as to get a captive customer for crude oil it produces.
Saudi Aramco, the world’s biggest oil company, and its partner Abu Dabhi National Oil Co (ADNOC) have picked up 50 per cent stake in a planned USD 44-billion refinery in Maharashtra but the project is facing problems in acquiring land due to protests from local politicians.
Aramco and ADNOC will together hold 50 per cent stake in the 60 million tonnes per annum (MTPA) refinery and adjacent 18 MTPA petrochemical complex planned to be built at Ratnagiri district of Maharashtra by 2025.
The two will supply half of the crude oil required for processing at the refinery.
Like other major producers, the two are looking to lock in customers in the world’s third-largest oil consumer through the investment. Kuwait too is looking to invest in projects in return for getting an assured offtake of their crude oil.
Saudi Aramco is also keen on retailing fuel in India. A refinery in India can also be a base for it to export fuel to deficit countries in Europe and the Americas.
India has a refining capacity of 247.6 million tonnes, which exceeded the demand of 206.2 million tonnes.
According to the International Energy Agency (IEA), this demand is expected to reach 458 million tonnes by 2040.