Global energy giants welcome to invest in India, its oil minister says
A new refinery to be developed by Saudi Aramco and Adnoc is on “right track”
Global energy companies are welcome to invest in India as Asia’s third-largest economy opens up its strategic sectors to foreign direct investment, the country's oil minister said.
“We are inviting oil majors. Recently the prime minister [Narendra Modi] visited Houston and met CEOs of the energy industry ... companies like ExxonMobil, BP, Shell, Rosneft, Aramco and Adnoc," Dharmendra Pradhan said on the sidelines of Abu Dhabi International Petroleum Exhibition and Conference.
"They are all [looking] towards the Indian energy market because in the next two decades, energy business will be in India. The incremental growth of the world's energy requirements will come from India, so everybody is welcome in India”.
India previously excluded large-scale foreign investment in important industrial sectors such as petrochemicals and coal.
The country, which imports more than 80 per cent of its oil needs, is now opening up these industries to foreign capital in a push to improve energy security and meet rising demand.
The Indian government is considering selling its stake in Bharat Petroleum Corporation Limited, one of the biggest oil companies in India, which operates two large refineries in Kochi and Mumbai.
Mr Pradhan also said a planned greenfield refinery to be developed by Saudi Aramco and the Abu Dhabi National Oil Company is on “right track” and a firm deal would be signed soon.
The project on India’s western coast, which will produce 1.2 million barrels per day, could cost more than $44 billion (Dh161.6bn). It will also involve domestic refiners Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum.
Adnoc and Aramco will have a 50 per cent stake in the project, which is also expected to produce 18 million tonnes of chemicals annually.
“There was an election in Maharashtra and there will be a new government; after that there will be clarity of the project and it will pick up,” Mr Pradhan said.
India accounted for 5.8 per cent of the world's oil consumption in 2018, third only behind China and the United States.
While demand for crude has been falling globally, it is expected to grow in India by more than 4 per cent annually to 2030, Indian refiner Nayara Energy said.
The country's refining capacity is also expected to face a shortage of around 3.5 to 4 million bpd in the future, consultancy Wood Mackenzie said.
State-backed refiners were tasked to bridge the gap by courting billions of dollars in foreign investment.
Mr Pradhan also said India is spending $60bn to create a gas-based energy network to reduce carbon emissions
“The investment is on ground, not at concept level or tendering process. All in the process of implementation. This is the strategy of India to create more decarbonised industrial growth,” he said.
The project is expected to meet the needs of about 70 per cent of India’s population, he said.
"We are creating a huge eastern grid in the eastern part of the country, we are building more terminals and we are very focused on the biomethane programme.”
The country plans to build 5,000 biomethane plants in the next few years, of which 500 are already under construction, he said.
New Delhi also recently signed an agreement with Aramco, which will lease a quarter of India's underground strategic petroleum reserve facilities in the district of Padur to store about 4.6m barrels of oil.
The process will be completed soon, Mr Pradhan said.
The country has underground emergency storage facilities in three locations as part of contingency plan to reduce the impact of any supply disruption.
Updated: November 13, 2019 10:47 AM