Russia's oil major Rosneft has expressed interest in building a greenfield refinery in India in a joint venture (JV) with public sector refiners, a report by The Economic Times (ET) said. Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL) are expected to be likely candidates for the JV. This refinery will be separate from the Gujarat refinery that Rosneft-backed Nayara Energy runs.
Separately, Indian public sector refiners are also looking for a scaled-down alternative to a $44 billion refinery on the west coast of the country which has already been delayed, it added.
The IOL, BPCL, and Hindustan Petroleum Corporation Ltd (HPCL) have been working on a refinery on the west coast with Saudi Aramco since 2018. But the project has been delayed due to the unavailability of land and political strife in Maharashtra.
The report added that HPCL is already overleveraged due to an upcoming refinery in Rajasthan. IOL already has a purchase agreement with Rosneft and BPCL has its eyes on a land parcel in Uttar Pradesh. Hence, the latter two are better positioned to partner with the Russian oil giant.
Moreover, the Centre and state refiners believe that India needs to add greenfield capacity to meet the rising demand for fuel in the country and it cannot wait for the west coast refinery to begin its operations. So, each refiner is planning to move away from the JV with Saudi Aramco and establish a greenfield refinery of its own, in partnership with foreign players.
An official quoted in the ET report added that there are chances that more foreign players approach these public sector refineries for partnership. The state refiners, however, may push to keep the majority stake in these JVs.