Oil firms prepare for potential investments from Aramco, Adnoc

Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) are preparing to receive investments from Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) even as the state-run oil marketing companies await the Maharashtra government’s decision on providing a fresh patch of land for the $70 billion Ratnagiri Refinery and Petrochemicals Ltd project.

IOCL, BPCL and HPCL will invest a total of ₹100 crore to complete preliminary work on the project, following which they intend of make a presentation to Aramco and Adnoc. While IOCL will put in ₹50 crore, BPCL and HPCL will contribute ₹25 crore each, said a senior official from one of the oil marketing companies.

“We have completed the configuration study and are preparing the project report. Then, we will be able to arrive at a cost and decide how to fund the project,” said a senior official from one of the oil marketing companies. “We will be able to reach out to Aramco and Adnoc with a detailed plan.”

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IOCL, HPCL and BPCL did not respond to queries emailed on 24 January.

With a 60 million tonnes per annum capacity, the Ratnagiri project is a joint venture of Aramco, Adnoc, IOCL, BPCL and HPCL. Aramco and Adnoc are expected to jointly own 50% of the refinery, with the remainder split between the three Indian oil companies.

Announced in December 2015, the project was to be commissioned by 2022, but delay in acquiring land has pushed the deadline to 2025. A pre-feasibility study was completed in January last year. Aramco and Adnoc had in July 2018 signed a memorandum of understanding to jointly develop and build an integrated refinery and petrochemicals complex in Maharashtra.

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It is, however, unclear if either Aramco or Adnoc will invest in the project as it is expected that two could only make a crude supply assurance for the Ratnagiri refinery.

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