The Russian firm is understood to have held preliminary discussions with Indian government officials and executives at state-run refiners regarding a new project in India, the people said. This will be separate from the Gujarat refinery that Rosneft-backed Nayara Energy operates.
IOC, BPCL likely candidates for tie-up
“Cooperation with Indian companies is being developed in the integral format throughout the whole technological chain, from production to refining and sales of petroleum products,” Rosneft told ET in an email. “Rosneft aims to further expand cooperation with Indian partners. Information on specific plans you will learn later in the relevant company announcements.”
The oil ministry didn’t respond to ET’s queries, and neither did the state-owned Indian Oil Corp, Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL).
It’s unclear which Indian refiner will end up partnering Rosneft but Indian Oil and BPCL could be the likely candidates. HPCL is overleveraged due to a greenfield refinery it’s building in Rajasthan. Indian Oil is the most upbeat among state firms on adding capacity and already has a crude purchase agreement with Rosneft, while BPCL has a land parcel ready for a refinery in Uttar Pradesh.
State refiners have increasingly realised that they need an alternative to the west coast project in which Saudi Aramco had agreed in 2018 to take a 50% stake, people familiar with the matter said. The project is being jointly developed by Indian Oil, BPCL and HPCL. Unavailability of land and Maharashtra political strife may keep the leadership distracted, worsening the project’s prospects, said people familiar with the matter.
Overseas partners
The government and the state refiners are of the view that India needs to add greenfield capacity to meet future fuel demand, and can’t wait endlessly for the west coast refinery to take off, the person said. Therefore, each state refiner is now planning to move away from the joint venture and evaluate greenfield capacity separately, in partnership with foreign players, he said. More overseas entities are likely to be approached for partnership talks.
State refiners plan to keep the majority in any joint venture with foreign firms, as that would help them control crude sourcing strategy as well as product pricing in domestic market, a person familiar with companies’ plans said.
