Saudi Aramco has begun talking up India to purchase a stake in the Asian giant's upcoming west coast refinery, according to an announcement made by Oil Minister Dharmendra Pradhan.
The official told reporters in New Delhi that selling part of the 1.2 million barrels per day (bpd) facility would give India a greater voice in the international oil trade.
Current plans give Indian Oil Corp a 50-percent stake, while Hindustan Petroleum Corp and Bharat Petroleum Corp each get 25-percent stakes.
Aramco, Saudi Arabia's state oil company, is currently planning an initial public offering to raise anywhere from $100-$400 billion in capital that will diversify Saudi's oil dependent economy.
Apart from Tadawul, the KSA owned stock exchange, Riyadh wants one foreign listing for the 2018 IPO. New York, London, Toronto, and other financial hubs have competed for the opportunity to host the largest IPO ever over the past few months.
Though no Indian cities are on the shortlist for this honor, Pradhan mentioned in May that Indian refiners were interested in purchasing a stake in Aramco once its shares float next year. In exchange for providing New Delhi a reliable source of crude, Saudi Arabia would participate in new refinery projects.
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"I'm expecting Aramco to be a supplier for a very long time," Pradhan said. "We discussed the idea with [Saudi energy] minister [Khalid al] Falih in Houston this year. [Aramco] is interested in the joint venture."
Riyadh has also invited China-India's main trade rival-to be a cornerstone investor in the IPO. Beijing has begun assembling a consortium of oil companies to buy Aramco shares, while Hong Kong has been vying for the listing independently. The Chinese bourse stands as a front-runner to host the IPO amongst Saudi's options in Asia.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
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