New Delhi, March 28, 2025 – Saudi Aramco, the world's largest oil producer, is reportedly in talks to invest in two behemoth refinery projects in India. The move will further strengthen Saudi Arabia's foothold in the South Asian market as well as support India's growing demand for refined petroleum products.
Reports indicate that Aramco is negotiating with Bharat Petroleum Corporation Limited (BPCL) to establish a refinery in Andhra Pradesh, and with Oil and Natural Gas Corporation (ONGC) for yet another refinery project in Gujarat. These investments are expected to change India's refining muscle and ensure a long-term Saudi Arabian crude oil supply.
Strategic Expansion Amid Shifting Market Trends
Saudi Aramco has been pursuing actively the expansion of its refining business globally, particularly in rapidly developing markets like India. Indian crude imports have been diversifying in the recent past with increasing volumes being supplied from Russia, the US, and Africa. This has resulted in a reduction of Saudi Arabia's share of Indian oil imports, prompting the kingdom to seek other ways of securing its market share.
By investing in Indian refineries, Aramco aims to guarantee a safe outlet for its crude and benefit from India's rising energy market. The Indian administration, in the meantime, finds this probable investment as a bold step towards gaining its energy security and reducing dependency on overseas producers.
Growing Refining Capacity of India
India is now the third-largest oil consumer in the world and is likely to expand its refining capacity from 252 million metric tons annually (MMTPA) to 400 MMTPA by 2030. The future refinery projects with Aramco's participation will be crucial in achieving this target.
- BPCL's Refinery in Andhra Pradesh: It will cater to both global and domestic markets, enabling India to enhance the exports of petroleum.
- ONGC's Refinery in Gujarat: The refinery in Gujarat will work towards upgradation as well as enhanced refining capacity to make fuel production at an economic rate.
Industry analysts say Aramco's participation in the projects could introduce advanced refining technology and improve fuel efficiency in India. In addition, the joint venture could provide jobs and trigger economic growth in the regions where the refineries are to be set up.
Aramco's History of Interest in India
This is not the first instance of Saudi Aramco looking for investment opportunities in India. In 2019, the company had expressed interest in the Ratnagiri Refinery and Petrochemicals Limited (RRPCL) project, a $44 billion refinery in Maharashtra. The project was delayed due to land acquisition problems.
Aramco's return to Andhra Pradesh and Gujarat is a sign of its continued interest in expanding its presence in India's energy sector. If sealed, these deals can potentially unlock greater collaboration in petrochemicals, clean energy, and infrastructure development between the two nations.
What's Next?
Even though negotiations are in process, a technical partnership between BPCL, Saudi Aramco, and ONGC can soon be announced formally. The investment will help:
✔ Refining capacity uplift to maintain India's increasing fuel demand.
✔ Upsurge in using better technology in refinery processes.
✔ Enhanced India-Saudi Arabia energy relationship for long-term energy security.
✔ New career prospects in the oil and gas industry.
As India continues to rise as an energy power house globally, collaborations such as this will form the foundation of its future. More on this as the story unfolds.
For more information, see the full story on Reuters.