Oil giant Saudi Aramco to invest in India
During Prime Minister Modi's visit to Saudi Arabia, oil-giant Saudi Aramco announced their plans to make major investments in the Indian petroleum sector. Khalid Al Falih, Saudi Health Minister and Saudi Aramco-Chairman, stated that India is the preferable destination to make investments in the time of global economy-crisis. Saudi Aramco is the world's largest oil firm with over 265 billion barrels of crude reserve.
Saudi Aramco, officially known as the Saudi Arabian Oil Company, is a state-owned petroleum and natural gas company in the Kingdom of Saudi Arabia. Analysts admit that it's impossible to estimate the accurate value of Saudi Aramco, which produces 9.5 million oil barrels a day. However, the Dhahran-based company is the world's most valuable company as some estimates go as high as $10 trillion.
A 2015 Forbes report stated that Saudi Aramco was the world's largest oil and gas company. The company owns, develops and operates all the energy resources in Saudi Arabia. It operates more than 100 oil and gas fields in Saudi.
In 1933, the Saudi government had granted a concession for exploring oil to America-based Standard Oil of California (SOCAL). SOCAL assigned the concession to its wholly-owned subsidiary California-Arabian Standard Oil (CASOC). In 1944, the company's name was changed to Arabian-American Oil Company (ARAMCO). In 1988, following a royal decree, the company had changed its name from Aramco to Saudi Arabian Oil Company (Saudi ARAMCO).
Royal Dutch Shell Plc and Saudi ARAMCO had decided to put an end to their 18-year-long refining partnership to pursue divergent goals. Shell Plc planned to sell its assets worth $30 billion within three years, whereas Saudi ARAMCO was considering the IPO option. Although no final agreement details were revealed, it was reported that Shell would get some amount of cash from Saudi ARAMCO.
Saudi ARAMCO had announced to sell a small stake in the company to get funds worth $2 trillion by 2017-2018. Mohammed bin Salman, the deputy crown prince of Saudi, stated that listing even 5% of the company then, when the oil-prices are at 10-year low didn't make sense. Experts expect that the company would sell the small chunk when the oil prices are higher.
India and Kingdom of Saudi Arabia are looking at taking their relationship beyond the existing buyer-seller relation in oil and energy sector and go for joint ventures and investments in oil fields and refineries.
Saudi Arabia is India's largest crude oil supplier, which alone supplies over one-fifth of India's total imports. Saudi Aramco is the national oil company of Saudi Arabia which has crude oil reserves accounting for over 15% of the global oil deposits. India is keen on Saudi's investment in 'high-temperature deep sea offshore exploration' and has opened the same sector for FDI.