Saudi Aramco is in talks to buy a 20% stake in a new $11 billion oil refinery planned by India’s state-owned Bharat Petroleum Corporation Limited (BPCL), two sources familiar with the matter said.
The refinery will be built at Ramayapatnam port in Andhra Pradesh, on India’s east coast. It is designed to process between 180,000 and 240,000 barrels of crude oil per day, according to BPCL officials.
BPCL plans to sell a 30% to 40% equity stake in the project to outside investors. Saudi Aramco is expected to take 20%. Oil India Ltd may acquire close to 10%, while banks could hold another 4% to 5%, a senior BPCL official told Indian outlet Business Standard.
The Andhra Pradesh government has already allocated 6,000 acres of land for the refinery and associated petrochemical units. The state has asked BPCL to begin commercial operations by January 2029, according to an official order cited by Reuters.
“The refinery is critical to meeting India’s future fuel and petrochemical needs,” the BPCL official said, speaking on condition of anonymity. “Strategic investors will also strengthen crude supply security.”
BPCL is India’s second-largest state refiner. It currently operates three refineries with a combined crude processing capacity of about 706,000 barrels per day. Like other Indian refiners, BPCL is expanding to meet rising domestic demand.
India is the world’s third-largest crude oil importer. Demand growth has surged due to rising incomes, urbanisation, and increased vehicle ownership. Analysts say India has now overtaken China as the largest driver of global oil demand growth.
For Saudi Aramco, the investment fits a broader strategy to secure long-term crude supply agreements in Asia. The region is expected to account for most global demand growth in the coming years.
“Downstream investments help Aramco lock in future sales,” said an India-based energy analyst. “India is now the most important growth market.”
Earlier this year, sources told Reuters that Aramco was in talks to invest in two planned Indian refineries. Apart from BPCL’s project in Andhra Pradesh, the Saudi oil giant is also discussing a separate refinery venture with Oil and Natural Gas Corporation (ONGC) in Gujarat, on India’s west coast.
Those discussions are ongoing, and no final investment decisions have been announced.
If completed, the BPCL refinery would deepen energy ties between India and Saudi Arabia at a time when both countries are reshaping their long-term energy strategies. India is seeking supply security, while Saudi Arabia aims to protect market share in a changing global energy landscape.
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