Saudi energy minister Khalid al-Falih has hinted at a possible joint investment plan between Saudi Arabia and Indian giant Reliance group.
“We discussed opportunities for joint investments and cooperation in petrochemical, refining and communication projects,” Al-Falih said in a tweet in Arabic after meeting Reliance Group chairman Mukesh Ambani.
The two met in the weekend at the pre-marriage reception of Ambani’s daughter, in India.
The meeting has set off talks in industry circles in India about the two sides joining hands for the future expansion of RIL’s petroleum refinery at Jamnagar in the Indian state of Gujarat.
“These (the move on joint investments between Saudi Arabia and RIL) are just initial talks and there is no proposal on any joint investment on the table as of now,” a RIL group official spokesman told Arabian Business.
“We can comment on this issue only when a concrete proposal from the Saudi side comes to us,” the spokesman added.
There have been reports about RIL planning a mega expansion programme at its 60 plus million-capacity crude refinery complex at Jamnagar.
Petroleum industry sources said RIL has approached government authorities for environment clearance for a 7-8 million capacity expansion at its refinery project. A recent news report by Bloomberg, however, talked of Reliance planning a 30 million capacity expansion at its Jamnagar complex.
Significantly, Saudi Aramco, world’s largest crude producer, signed an agreement in April this year to pick up a 50 percent stake in the $44 billion mega Ratnagiri Refinery and Petrochemical complex proposed to be set up jointly by India’s state-owned Indian Oil Corporation (IOC), Bharat Petroleum (BP) and Hindustan Petroleum (HP) at Ratnagiri in Maharashtra.
“There have been talks of the Ratnagiri project (of IOC-BP-HP) facing problems in acquiring land in Maharashtra and therefore even a possibility of the project getting shifted to Gujarat. In either case, this is bound to cause delay in the implementation of the project and hence there could be a possibility that the Saudi side wants to look at investing in the Reliance project, which already exists,” a leading petro-chemical sector expert and a former senior executive at RIL, told Arabian Business.
Industry sources said since the Saudis are keen to invest in India, they may want to fast track its investments.
“It all depends on what is the intention of the Saudi side. If their intention is to get a captive market in India for their crude, then they would be keen to join hands with the Reliance in its planned refinery expansion programme. Otherwise, the Saudi side could be looking at investing in a petrochemical project of Reliance also, which would enable them for a buyback of products,” the former RIL executive, who did not want to be identified, said.
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