World’s largest oil firm Aramco plans to invest in India
Saudi Oil giant Aramco, the world’s largest oil firm with crude reserves of about 265 billion barrels, plans to make major investment in India’s petroleum sector as it considers India the most preferred destination to invest at a time when the global economy is in a crisis. Head of Aramco Khalid A Al Falih called on Prime Minister Narendra Modi during which he conveyed that the state-owned company was eyeing India as the most preferred investment destination.
“Minister Al Falih to PM: Aramco looks to India as its No 1 target for investmen,” External Affairs Ministry Spokesperson Vikas Swarup tweeted. Aramco is Saudi Arabia’s national oil company with crude reserves of about 265 billion barrels which is over 15 per cent of all global oil deposits. The Saudi government plans to sell shares in Aramco and transform the oil giant into an industrial conglomerate.
Energy-powerhouse Saudi Arabia is India’s largest crude oil supplier, accounting for about one-fifth of total imports and both sides were of the view that cooperation in the sector should expand. India is specifically looking at Saudi investment in “high temperature deep sea off shore exploration” and has opened up the sector for FDI.
India’s ties with Saudi Arabia, one of the world’s leading oil producers, have been on an upswing over the last two decades based on burgeoning energy ties. The two countries are keen to move beyond buyer-seller relationship in the sector and go for joint ventures and investment in refineries and oil fields.
Moreover, India and Saudi Arabia on Sunday vowed to substantially boost investments and their trade ties as Indian Prime Minister Narendra Modi invited cash-rich Saudi firms to invest in infrastructure and form joint ventures for oil exploration.
A joint statement issued after the talks between Modi and Saudi King Salman bin Abdulaziz said that both countries agreed to forge a deeper partnership in energy sector focusing on investment and joint venture in petrochemical complex.
“The two leaders emphasised the importance of expanding trade and investment ties to drive the strategic engagement forward. They directed their Finance and Trade Ministers to work together to find ways and means to substantially increase the flow of bilateral investments and growth of trade ties,” the statement said.
There has been a steady increase in bilateral trade, which stood at $39 billion in 2014-15. “The two leaders agreed upon the need to further strengthen these ties, particularly through diversifying non-oil trade,” it added.
During the Prime Minister’s two-day visit India showcased its initiatives at improving the ease of doing business and efforts to simplify and rationalise existing rules and relax the foreign direct investment norms in key areas, including railways, defence and insurance. Saudi Arabia is India’s largest supplier of crude oil. The two countries also expressed satisfaction at the growing bilateral trade in the energy sector.
“The two leaders agreed to transform the buyer-seller relationship in the energy-sector to one of deeper partnership focusing on investment and joint ventures in petrochemical complexes, and cooperation in joint exploration in India, Saudi Arabia and in third countries,” the statement said. Modi invited Saudi firms such as Aramco and SABIC to invest in the India’s infrastructure sector.
“Inviting Saudi Arabia to be a partner in India’s growth story, Modi encouraged Saudi Aramco, SABIC and other Saudi companies to invest in the infrastructure sector in India and to participate in projects creating mega industrial manufacturing corridors, smart cities as well as the Digital India and Start up India programmes,” the statement said. The Saudi side expressed its interest in investing in infrastructure development in India, especially in priority areas such as railways, roads, ports, and shipping.