Adnoc joins hands with Aramco for Ratnagiri refinery

Project will be a 50:50 JV between the two companies and Indian consortium of IOCL, HPCL & BPCL

MUMBAI: The world’s biggest oil producer, Saudi Arabian Oil Co., or Saudi Aramco, has roped in Abu Dhabi National Oil Co. (Adnoc), the state-run oil firm of the United Arab Emirates (UAE), to jointly develop the massive refinery and petrochemicals complexes coming up at Ratnagiri in Maharashtra.

“Saudi Aramco and Adnoc signed an MoU (memorandum of understanding) today to jointly develop and build an integrated refinery and petrochemicals complex at Ratnagiri in Maharashtra,” the Indian government said after the agreement was inked in New Delhi on Monday.

The development on the 60 million tonnes per annum (mtpa) project marks the growing importance of buyers at the centre of oil giants’ growth plans and assumes significance given that the UAE supplies 6% of India’s crude oil imports. With three million barrels per day of crude oil production, Adnoc is the world’s 12th largest producer and UAE is a member of the Organization of the Petroleum Exporting Countries (Opec). Opec accounts for about 83% of India’s total crude oil imports and 40% of global production.

Mint reported on June 21 about Adnoc’s plans to pick up 25% in the $44 billion refinery and petrochemicals project, post which Saudi Aramco and Indian Oil Corp. Ltd will hold 25% each in the project, while 12.50% each will be held by Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL).

Given its large volumes, any project with a capacity of over 15 mtpa is referred to as international economic capacity in industry parlance. Experts say by that yardstick, Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) is a mega project. When the MoU for RRPCL was signed in April by Saudi Arabia’s energy minister Khalid Al-Falih, it was announced that Saudi Aramco may induct a strategic partner by divesting its 50% stake in the project.

“RRPCL which is promoted by a consortium of Indian PSUs consisting of IOCL, BPCL and HPCL will now have Saudi Aramco and Adnoc as overseas strategic partners. The project will be set up as a 50:50 joint partnership between the consortium from India and Saudi Aramco and Adnoc. This will be the single largest overseas investment in the Indian refining sector,” the government said.

The MoU was signed by Saudi Aramco president and chief executive officer (CEO) Amin H Nasser and UAE’s minister of state and Adnoc Group CEO Sultan Ahmed Al Jaber during the ongoing visit of UAE’s foreign affairs and international cooperation minister Sheikh Abdullah bin Zayed bin Sultan Al Nahyan.