Inspenet, October 15, 2023.
India seeks to get Aramco, Saudi Arabia’s oil company, involved in its 6.5 million metric ton (MMT) strategic petroleum reserve (SPR) project, with the aim of strengthening its relations with its main oil supplier .
According to a report seen by Reuters, these two nations have held talks about Aramco’s possible participation in the SPR program for several years. However, these discussions have gained momentum after the meeting between Crown Prince Mohammed Bin Salman and Prime Minister Narendra Modi last month.
“Under the Strategic Petroleum Reserves Program Phase II, the construction of two new commercial and strategic oil reserves of 6.5 MMT has been approved,” the Indian government said in an internal document, adding that “Saudi Arabia’s Aramco may be invited to participate in Phase II .”
Aramco declined to comment and the Saudi government did not respond to email requests for comment. For their part, the office of the prime minister of India, the Ministry of Petroleum and the Ministry of Finance also did not provide responses.
India, being the third largest importer and consumer of oil globally, imports more than 80% of its oil. To protect against possible supply disruptions, it has established strategic storage facilities in three locations in the south of the country, with the capacity to store more than 5 million tons of oil .
Abu Dhabi National Oil Co (ADNOC) has secured a lease for 750,000 tonnes of oil storage capacity at the 1.5 million tonne Strategic Petroleum Reserve (SPR) facility located in the city of Mangaluru, in the South India.
India has carried out two rounds of roadshows as part of the second phase of its SPR program and this process has attracted interest from companies such as Trafigura, British Petroleum (BP), Petrochina, Hyundai, Gulf Energy, Glencore and Shell, as well as as reported in a government statement.
Regarding a possible deal between India and Saudi Aramco (2222.SE), KPMG partner Anish De commented: “Getting investment there will align economic and political interests. There are good economic and political reasons for the two countries to do so“.