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India could invest in Aramco IPO to strengthen ties

Published 22/05/2017, 19:53
Updated 22/05/2017, 20:00
© Reuters. A view shows Saudi Aramco's Wasit Gas Plant

By Dmitry Zhdannikov and Ernest Scheyder

VIENNA (Reuters) - India said on Monday its state refiners could become cornerstone investors in Saudi Aramco when it floats its shares next year, as New Delhi seeks to strengthen ties with the world's largest oil producer.

Oil minister Dharmendra Pradhan told Reuters the purchase of a stake in Aramco could be part of a plan by Indian state refiners to set up a refining venture with the Saudi giant.

"I'm expecting Aramco to be a supplier for a very long time... We discussed the idea with (Saudi energy) minister (Khalid al) Falih in Houston this year. They (Aramco) are interested in the joint venture," Pradhan said in an interview.

He said three Indian state refiners were planning to build a new refining complex with a 60 million tonnes capacity a year on the country's west coast and a partnership with a big supplier would strengthen the proposal.

Aramco plans to list around 5 percent of its stocks on multiple exchanges next year and hopes to raise as much as $100 billion via the share listing, which could value the world's largest oil producer at as much as $2 trillion (1.54 trillion pounds).

Sources have told Reuters Aramco was planning to offer its biggest oil consumers such as China and India the role of cornerstone investors in the IPO to strengthen the relationship for the long-term.

"It is a good idea," said Pradhan. "I'm not ruling this out. We will see and evaluate".

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India, the world's third biggest oil consumer, imports 86 percent of its oil needs from OPEC nations to feed its 4.6 million barrels per day (bpd) refining capacity. The country plans to raise its refining capacity to 6.2 million bpd by 2023.

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