Indian Oil Corp, Bharat Petroleum Corp and
Hindustan Petroleum have signed an agreement with Saudi Aramco to set up the
largest greenfield integrated oil refinery on the western coast in India at the
ongoing 16th International Energy Forum (IEF).
India:
The association
of three state-run Oil Marketing Companies (OMCs) in India, have recently signed an agreement with Saudi Aramco
which is the largest producer of crude oil in the world, to set up the largest
greenfield integrated oil refinery on the western coast in India.
A Memorandum of Understanding
(MoU) was signed by Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and
Hindustan Petroleum (HPCL), during the 16th International
Energy Forum (IEF) in the presence of India’s Oil
minister and Saudi Arabia’s Minister of
Energy, Industry and Mineral Resources.
The Minister of Energy,
Industry and Mineral Resources for Saudi Arabia, in an interview stated that the
leaders of both Saudi Arabia as well as India want to increase co-operation
between the two countries on energy security and the move is the stepping stone
in that direction. Saudi Aramco will be a 50 per cent equity partner and the
rest 50 per cent will be held by the Indian consortium.
The Indian Oil Minister
informed that the pre-feasibility study of the 60 Million Ton Per Annum (MMTPA)
refinery is already complete and the refinery would be able to process 1.2
million barrels of crude oil and around 18 MMTPA of petrochemicals. The
refinery is proposed to be built at Babulwadi at Ratnagiri in Maharashtra.
Saudi Aramco, the state-owned
company would have the flexibility to rope in another strategic partner in its
50 per cent equity and an international oil and gas company has already shown
interest in partnering with Aramco on the project. The Saudi Arabian Minister
stated that the project cost of $44 billion is expected to come down as
financial credit rating of Aramco is good, and the company has historically been
bringing down the cost of its projects.
The Saudi energy minister
also informed that 50 per cent of the crude requirement of the planned refinery
project will be met by Saudi Arabia and the refinery will have the flexibility
to source crude from other places. Aramco’s President and Chief Executive
Officer (CEO) said the company expects the refinery to be operational before
2025.
According to TechSci Research, the proposed
greenfield integrated oil refinery will open enormous potential for the Oilfield
services and Oilfield chemical market in India as well as Saudi Arabia. Evolving
technologies, rising demand for oil & gas and development of new fields
like the one proposed are few of the factors that will drive the market for
Oilfield services in India in the coming years. The refinery would also open up
employment opportunities.
According to the recently
published report by TechSci Research, “India
Oilfield Services Market, By
Application (Onshore & Offshore), By Service (Drilling Services, Mud
Engineering, Wireline Services, Pressure Pumping Services & Others),
Competition Forecast & Opportunities, 2013 - 2027”, India oilfield services
market stood at around $ 1.35 billion in 2017 and is forecast to grow at a CAGR
of over 7% to surpass $ 2.84 billion by 2027. Growth in the market is
anticipated on account of growing demand for oil & gas, rising on-site
demand and evolving technologies being used in oilfields. West and East regions
are expected to witness a faster growth due to the presence of larger oil
fields and allocation of new blocks in both offshore and onshore sites.
Moreover, rising foreign investments in Indian oil & gas sector and rising
adoption of advanced technology is further expected to propel growth in India
oilfield services market through 2027.
Moreover, TechSci Research believes that oilfield
chemicals play a significant role at each stage of exploration and production
of oil & gas, from drilling to transport of output from the field to
refinery. Oilfield chemicals are used during this entire process with the prime
objective of enhancing the production capacity and process efficiency. Saudi
Arabia accounts for the second largest crude oil reserves globally, depicting
efficient utilization of proved reserves. Moreover, increasing demand for fuel
and energy in domestic as well as export market is shifting the focus of oil
companies in Saudi Arabia towards offshore drilling activity, to further
increase oil & gas production in the country.
According
to the recently published report by TechSci
Research, “Saudi ArabiaOilfield Chemicals Market Forecast and Opportunities, 2020”, the oilfield chemicals market
in Saudi Arabia is projected to surpass USD960 million by 2020. Growth in the
market is expected on account of rising oil & gas production, along with
anticipated growth in the exploration of shale gas depositsin the country.
Saudi Arabia is home to 100 major oil and gas fields, of which 8 oilfields
produce more than 50% of crude oil every year. Most of these large-capacity
oilfields lie in the eastern province of the country, due to which the eastern
province continues to dominate the market in terms of revenue contribution.
Saudi Aramco is currently the largest oil and gas operatorin Saudi Arabia,
while Baker Hughes is the leading oilfield chemicals producer, followed by
Nalco Champion and REDA Oilfield.
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