Why India is wooing Aramco

new delhi/mumbai — India’s newest petrochemicals maker is seeking to sell half its $4.6 billion facility to Saudi Arabian Oil Co, according to people with knowledge of the matter.

Formal talks between ONGC Petro additions Limited (OPaL) and the world’s biggest oil exporter, known as Saudi Aramco, will start soon, said the people, who asked not to be named as the information isn’t public. OPaL’s earlier talks with a unit of Kuwait Petroleum about investing in the project stalled last year, the people said.

A spokesman for OPaL was unable to comment. Saudi Aramco and Kuwait Petroleum didn’t immediately respond to requests for comment.

The investment could help Saudi Aramco strengthen its hand in the world’s largest oil consuming region as it prepares for what may be the biggest-ever initial public offering. India’s per capita consumption of polymer products, which is about a third of the global average, is expected to expand as a growing middle class, increasing income levels and higher urbanisation drive growth, Prime Minister Narendra Modi said last month while inaugurating OPaL’s plant.

“India’s petrochemical business is booming and Aramco will definitely want to be a part of this growth,” said Vaibhav Chowdhry, an analyst at KR Choksey Shares & Securities.

The country’s petrochemical market is expected to grow as fast as 12 per cent annually for next several years, he said.

OPaL hosted a team from Saudi Aramco at its plant in the western state of Gujarat last month, they said. — Bloomberg