NEW DELHI: Saudi Aramco remains engaged with the proposed $44-billion refinery-cum-petrochemicals complex in Maharashtra, the project’s CEO said amid speculation that the oil crash may tempt Saudis to dump the venture for a stake in BPCL or Reliance Industries’ refinery.

“This project is not competing with any other Indian project for foreign investment and can stand on its own merit, attract investment and offer decent returns,” B Ashok, the CEO of Ratnagiri Refinery & Petrochemicals Ltd, which is setting up the 60 million tonnes a year refinery, told ET in an interview. “From a long-term perspective, it serves the interest of foreign investors well as it will not require immediate cash flow and offer access to one of the few markets in the world where oil demand is expected to grow.”

Saudi Aramco had agreed in 2018 to take 50% stake in the proposed refinery – the other half would be with Indian Oil, BPCL and HPCL – and share part of that with the UAE’s Abu Dhabi National Oil Company (Adnoc).

Saudi Aramco also has a deal to buy a $15 billion worth of stake in Reliance Industries’ oil business and is also seen as a top contender, along with Russia’s Rosneft, for the purchase of the government’s majority stake in BPCL.

Compared to the proposed mega refinery, these two deals come with limited uncertainty as they can give Saudi Aramco immediate access to refineries and retail network in India at a time the pandemic has destroyed global oil demand, crushed prices, slashed the earnings of oil companies and strengthened belief that the oil demand may have already peaked.

“While Saudi Aramco may look at other opportunities in India, they can also continue to stay invested in this project,” said Ashok.

While technical configuration has been readied, the unavailability of land has limited the progress for the project, the world’s biggest greenfield refinery, whose original deadline for completion was 2022.

Besides, a profit slump and its intention to stick to the planned $75 billion dividend payout this year is expected to leave Saudi Arabia with limited resources for investment.

“The first cash call for the project would be made after a couple of years and the entire proposed investment will be spread over five-seven years. By the time of first cash call, the pandemic would have subsided and pessimism regarding the oil market would have faded,” Ashok said, counting the advantages of investing in the project. “The proposed refinery will be an opportunity for Saudi Aramco and Adnoc to sell their additional volumes (to India).”

It would be a huge risk for the country if domestic supply of refined products falls short of demand in future, Ashok said, defending the need to build the mega facility. “The pandemic has clouded the vision right now, but we as a country shouldn’t hesitate in building an integrated and flexible refinery and petrochemical project which is technologically superior, more efficient and of world-class scale. This will give significant impetus to economic development, self-reliance and employment opportunities,” he said.

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