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Dutch oil major Royal Dutch Shell is planning to snap up a major stake in a petrochemical businesses, according to anonymous sources cited by Reuters.
According to the source, Shell signed a memorandum of understanding to pick up a 50% stake in India-based Nayara Energy’s petrochem project.
Nayara Energy Limited (formerly Essar Oil Limited), which also runs India’s second-largest single-site refinery that makes up 8% of India’s total refinery capacity, is 49.13% owned by PJSC NK Rosneft, which it picked up in August of 2017.
The other owners include Trafigura and Russian United Capital Partners Investment group.
The Reuters source claims that the deal was discussed as far back as November of last year, months before the pandemic decimated Big Oil’s bottom lines.
The project will be capable of producing 10.75 million tonnes of chemicals, according to Nayara’s proposal.
Shell already has a presence in India, including fuel stations, an LNG import terminal, a port, and a plant that turns waste into gasoline and diesel.
Another of Shell’s petrochemical complex projects in the United States has suffered setbacks as a result of the pandemic, announcing in the early stages of the pandemic that it would suspend construction activity in its Beaver County petrochemical facility in Pennsylvania out of fear for its workers. Development later resumed, then stopped, before resuming yet again.
The source said that a new and equal joint venture will be created for building the project, Reuters reported on Wednesday.
India’s crude oil demand and refining capacity is sizable as the world’s third-largest oil consumer and importer.
The largest share of India’s crude oil is sourced from the Middle East, mainly from Iraq.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.