Shaikh Abdullah and India’s Petroleum and Natural Gas Minister Dharmendra Pradhan look on as Saudi Aramco CEO Amin H. Nasser (centre) and chairman of the board of directors of Abu Dhabi Ports Sultan Ahmad Al Jaber (right) sign the MoU in New Delhi. Image Credit: WAM

Abu Dhabi: Energy giants Abu Dhabi National Oil Company (Adnoc) and Saudi Aramco will jointly invest in the development of $44 billion (Dh161 billion) Ratnagiri refinery and petrochemicals complex that is coming up in the western Indian state of Maharashtra.

The two firms signed a framework agreement in this regard in New Delhi on Monday that defines the principles of the joint strategic cooperation between Saudi Aramco and Adnoc to jointly build, own and operate the refinery complex in collaboration with a consortium of Indian national oil companies consisting of Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.

The signing of the deal took place in the presence of Shaikh Abdullah Bin Zayed Al Nahyan, UAE Minister of Foreign Affairs and International Cooperation, who is on a weeklong visit to India, and Indian oil minister Dharmendra Pradhan.

As per the agreement, Adnoc and Saudi Aramco will jointly own a 50 per cent stake in the new joint venture company named Ratnagiri Refinery and Petrochemicals Limited (RRPCL) while the remaining stake will be held by Indian companies like Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.

“This agreement strengthens the already close ties between the UAE and the Kingdom of Saudi Arabia and between the UAE and India. The UAE is unwavering in its commitment to its strategic multilateral relationships with both Saudi Arabia and India, as well as being a reliable partner in India’s energy security,” Shaikh Abdullah said in a statement.

“We look forward to exploring further opportunities to expand our energy partnerships and to collaborating on new, broader, opportunities that will further strengthen and deepen the long-standing economic links between our three countries.”

The refinery has a crude processing capacity of 1.2 million barrels per day and the investment by Adnoc and Saudi Aramco is the biggest overseas investment by any company in India’s refinery sector, Indian oil minister Padhan said in a twitter message.

Energy ties between India and the UAE have been strengthening in recent times. Earlier this year, a consortium of three public sector enterprises in India were awarded a 10 per cent stake in the development of Lower Zakhum offshore oilfield in Abu Dhabi.

Adnoc is also supplying crude oil for storage in India’s strategic petroleum reserves in Mangalore. A consignment of two million barrels of oil was delivered to India last month.

“This project is a clear example of our expanded downstream strategy, where we will make strategic, commercially-driven, targeted investments, both in the UAE and abroad,” Dr Sultan Ahmad Al Jaber, UAE Minister of State and Adnoc Group CEO, said while commenting on the refinery deal.

“By investing in this project, we will both secure offtake of our crude to a key market for Adnoc, as well as strengthen access in one of the world’s largest and fastest growing refining and petrochemical markets.”

Amin H. Nasser, Saudi Aramco President and CEO, emphasised the JV’s long-range focus.

“World energy demand is expected to grow exponentially by 2050, driven in large part by India. Saudi Aramco is proud to partner with Adnoc and RRPCL to help ensure that the world’s fastest-growing economy has secure, reliable energy feedstocks for its long-term prosperity.”