ADNOC may pick up 25% stake in Ratnagiri refinery
INDIA INVESTMENT Firm plans to buy stake in $44 bn project from Aramco NEWDELHI:Abu
Dhabi National Oil Co., or ADNOC, the state-run oil company of the United Arab Emirates, may pick up a 25% stake in the largest global refinery and petrochemicals complex coming up at Ratnagiri, Maharashtra.
ADNOC, the only one to commit to India’s crude oil reserve programme till date, plans to acquire the stake from the world’s biggest oil producer, Saudi Arabian Oil Co., or Saudi Aramco, which has partnered with a consortium of Indian staterun companies for the $44 billion project.
The development assumes importance 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.
“Post ADNOC’s acquisition of a 25% stake, 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),” said one person aware of the development, requesting anonymity.
When the memorandum of understanding for the 60 million tonnes per annum (mtpa) Ratnagiri Refinery and Petrochemcials Ltd (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% equity stake in the project. Apart from investing in the project, Saudi Aramco will also supply crude oil to the project, ensuring supply secu- rity. “Aramco has the freedom to offload to anyone, including ADNOC,” said an Indian govern- ment official, requesting ano- nymity.
News wire agency Press Trust of India on May 12 reported about ADNOC’s interest in the project.
With buyers at the centre of its growth plans, ADNOC has a pres- ence in India’s evolving energy security architecture. The first consignment of 2 million barrels of crude oil from UAE reached the strategic petroleum reserve at Mangaluru in May.
Indian Strategic Petroleum Reserve Ltd (ISPRL) has an agreement with ADNOC under which the latter will store crude oil at its own cost. This agreement was signed during Prime Minister Narendra Modi’s visit to the UAE in February. While the oil storage facility will enable ADNOC meet market demands across Asia, it will also allow it to sell part of the crude oil to Indian refineries during normal times.
UAE is also a member of the Organization of the Petroleum Exporting Countries (Opec) grouping, which accounts for about 83% of India’s total crude oil imports and 40% of global production.
Queries emailed to Saudi Aramco, ADNOC, HPCL, BPCL and the ministry of petroleum and naturals gas in India on June 14 remained unanswered. An IOC spokesperson in an emailed response said: “It is the prerogative of Saudi Aramco to bring in additional partner, if any. As and when something is firmed up, we shall inform you of the same.”
The project has also been facing protests by farmers, who oppose the refinery and are refusing to surrender land, fearing it could damage a region famed for its Alphonso mangoes, vast cashew plantations and fishing hamlets.
ADNOC’s presence in India’s energy mid-stream sector will help the world’s third-largest energy consumer, after the US and China.