Aiyar: Building bridges

New Delhi, April 1: Saudi Aramco is keen to pick up a stake either in Indian Oil?s Paradip refinery project or Hindustan Petroleum?s Vizag refinery or both as part of the criss-cross investment deals that petroleum minister Mani Shankar Aiyar is trying to promote between India and Saudi Arabia.

?Saudi Aramco would invest either in the Paradip refinery project or the Vizag refinery or may be both. The discussions are still on and the next round of talks will be held in Dubai on March 7,? confirmed a senior petroleum ministry official. ?We have made an offer and it received a positive response from Saudi Aramco.?

Aiyar said the Saudi Aramco investment could even lead to raising the capacity of Paradip refinery for exporting petroleum products to the eastern market.

The minister said such investments would lead to assured supplies of crude from Saudi Arabia, which has huge oil reserves and is the single largest source of Indian crude imports.

Similarly, Hindustan Petroleum?s investment in Saudi Aramco?s Yanbu refinery on the Red Sea coast would be used as an export base for feeding the western market and strengthen the economic ties between the two countries.

The minister said ONGC Videsh had been allowed to bid for natural gas exploration by the Saudi government and these would be put on offer towards the end of this year.

Indian companies would then explore the possibility of clinching similar criss-cross investments in the entire hydrocarbon chain, he added.

Saudi Aramco will hold further talks with Indian Oil on setting up commercial storage facilities on a joint-venture basis in India. The proposal was mooted earlier but Saudi Arabia did not show enough interest at that time. The Saudi company has similar oil storage facilities in Rotterdam, South Korea and the Caribbean region.

S.M. Ghamdi, Saudi Arabia?s ambassador, said the co-operation in the hydrocarbon sector reflects the growing bilateral ties between the two countries and added that Prime Minister Manmohan Singh has been invited to visit Riyadh.

?Saudi Arabia had such joint ventures in the hydrocarbon sector with other countries like China, Japan and the Philippines. Hence, there was no need to be sceptical about the move,? Ghamdi said.

Saudi Arabia is India?s largest supplier of crude accounting for as much as 26 per cent of the total imports. Aiyar said at present around 25 million tonnes of crude is imported from Saudi Arabia and an assurance has been obtained of increasing it to 50 million tonnes in the next 10 years provided there is a need.

He said around 1.5 million Indians are staying in Saudi Arabia and their combined remittances are over $4 billion per year. ?The Saudi government is of the view that Indians are hard working and law abiding people. This impression will further help cement ties between the two countries,? he added.