Saudi Aramco Eyes Investment Plans in BPCL and ONGC Refineries

As per news reports, Saudi Aramco, the world’s largest oil exporter, is in discussions to invest in two refinery projects in India. These include a planned refinery by Bharat Petroleum Corp (BPCL) in Andhra Pradesh and a proposed refinery by Oil and Natural Gas Corp (ONGC) in Gujarat. The move aligns with Aramco’s strategy to secure a stable market for its crude oil in India, which is the fastest-growing energy consumer.  

India’s Refining Expansion and Market Diversification 

India, the 3rd-largest consumer and importer of oil, aims to become a global refining hub. With Western nations reducing their crude processing capacities to focus on cleaner energy sources, India is expanding its refining sector. Meanwhile, Saudi Arabia’s share in India’s oil imports has dropped as Indian refiners diversify their crude supply, including cheaper alternatives from Russia.  

Status of the Projects and Aramco’s Proposal 

BPCL has announced an $11 billion investment in its Andhra Pradesh refinery and petrochemical project. ONGC’s Gujarat refinery is still in the early planning stages. Aramco has proposed supplying crude oil equivalent to three times its stake in each project and aims to sell its share of production either in India or through exports.  

Challenges and Previous Refining Ventures 

While discussions are ongoing, sources indicate that the refinery projects will proceed regardless of Aramco’s investment. India has faced hurdles in previous refinery projects with Aramco. In 2018, Aramco joined a consortium for a major refinery project in western India, but land acquisition issues caused delays. Similarly, its 2019 agreement for a 20% stake in Reliance Industries’ oil-to-chemical business was called off due to valuation disagreements.  

Diplomatic and Strategic Developments 

Indian Prime Minister, Narendra Mod,i is expected to visit Saudi Arabia in the second quarter of the year. Both nations aim to finalise an agreement before the visit. Additionally, India plans to set up three new refineries, each with a capacity of 400,000 barrels per day, as part of its long-term energy strategy. This could open further investment opportunities for Aramco in the future.

Share performance

As of March 28, 2025, at 2:00 PM, the shares of Bharat Petroleum Corporation share price are trading at ₹277.45 per share, while the shares of Oil and Natural Gas Corporation share price are trading at ₹249.00.

Conclusion

Aramco’s investment in India’s refining sector could strengthen energy ties between the two nations. However, negotiations on crude supply terms and past investment challenges will influence the final deal. With India’s plans to expand its refining capacity, opportunities for collaboration remain open.

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