Saudi Aramco Targets 20 Percent Stake in New 11 Billion Dollar Indian Refinery

Saudi Aramco is positioned to acquire a 20 percent stake in a planned refinery that India’s state-owned Bharat Petroleum Corporation Limited (BPCL) intends to construct with an estimated total investment of approximately 11 billion dollars, according to reports from Indian business media.

BPCL has announced plans to develop the refinery at Ramayapatnam port in Andhra Pradesh state, located on the east coast of southern India. The facility is designed to achieve a processing capacity ranging between 180,000 and 240,000 barrels per day (bpd).

The Indian refiner, which ranks as the country’s second-largest state-owned refining operation with current crude processing capacity of 706,000 bpd, has outlined plans to divest between 30 and 40 percent equity to external investors. This divestment structure includes the 20 percent interest earmarked for Saudi Aramco, an approximately 10 percent stake allocated to Oil India Ltd (OIL), and an additional 4 to 5 percent equity portion designated for interested banking institutions, according to senior BPCL officials.

Earlier in 2025, BPCL secured the necessary land allocation for the new facility. The Andhra Pradesh state government approved 6,000 acres for the refinery and petrochemicals project, which carries an estimated price tag of 11 billion dollars (967 billion Indian rupees). The state government has established January 2029 as the target date for commencing commercial operations at the refinery.

BPCL currently maintains three operational refineries across India. The company, alongside other domestic refiners, is actively pursuing expansion of crude processing and petrochemicals capacity to address mounting demand in the world’s third-largest crude oil importing nation.

From the Saudi perspective, the investment represents a strategic effort to secure long-term crude supply arrangements in key Asian markets, which are expected to remain the primary drivers of global demand growth in the coming years. India has recently overtaken China as the single largest contributor to demand growth globally.

Industry sources within India have indicated that Aramco is currently engaged in discussions regarding investments in two separate planned refineries across the country. Beyond the BPCL refining and petrochemical complex in southern India, the Saudi state oil company is conducting parallel negotiations with Oil and Natural Gas Corporation Limited (ONGC) concerning a proposed refinery in Gujarat state on India’s western coast.

The investment strategy reflects broader patterns in global energy markets, where major crude producers are increasingly seeking downstream integration in high-growth consumption markets. For Saudi Aramco, participation in Indian refining capacity offers both market access and demand security during a period of transition in global energy consumption patterns.

India’s refining sector expansion aligns with the country’s economic growth trajectory and rising petroleum product consumption. The addition of significant new refining capacity addresses both domestic demand requirements and potential export opportunities, particularly given India’s strategic geographic position for serving regional markets.

The timeline for the Ramayapatnam project reflects aggressive development targets, with less than four years allocated from land acquisition to commercial operations. This schedule will require coordinated execution across engineering, procurement, construction, and commissioning phases, representing a substantial undertaking for BPCL and its partner investors.

The involvement of multiple stakeholders, including Oil India Ltd and banking institutions, demonstrates the scale of capital mobilisation required for contemporary refining projects. The financial structure spreads investment risk whilst providing BPCL with substantial equity capital to support development costs.