Saudi Aramco’s talks with India’s Reliance for refinery stake have ‘not stalled’

Saudi Arabia’s Energy Minister Khalid al-Falih said state-run Saudi Aramco’s talks with Reliance Industries to buy a minority stake in the Indian conglomerate’s refining assets have not stalled.

“The two companies, Reliance and Aramco, are talking with a lot of goodwill, with good intention,” al-Falih told Reuters in an interview on Thursday.

Reliance, controlled by Asia’s richest man Mukesh Ambani, operates the world’s biggest refining complex with capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar in western India.

State-owned Aramco, the world’s biggest oil producer, plans to boost investment in refining and petrochemicals to secure new markets for its crude amid a recent demand slowdown.

Reuters reported on Tuesday that talks between the companies had hit a roadblock as Reliance was keen on a higher valuation.

But Falih, who met Indian oil minister Dharmendra Pradhan in New Delhi on Thursday, said he was ‘optimistic’ that a deal between the two companies would work out.

“We still see daylight. We will announce the terms when they are concluded,” he said.

Aramco and the United Arab Emirates’ national oil company ADNOC teamed up with state-run Indian refiners last year in a plan to build a 1.2 million barrel per day refinery.

But the plan has faced delays as farmers refused to surrender land, forcing the Maharashtra government to find a new location.

India has invited Saudi Arabia to help build its strategic petroleum reserves, Pradhan tweeted after his meeting with Falih.

Pradhan asked Saudi Arabia to continue to ensure balance in oil markets, and raised concerns over disturbances in the Strait of Hormuz affecting the movement of crude and gas tankers.

Saudi is the second biggest oil supplier to India after Iraq.

Falih said the kingdom will supply additional oil to India if required. New Delhi has suspended purchases of Iranian oil from May, under pressure from U.S. sanctions against Tehran’s nuclear programme.