China Takes Indirect Route to Acquire Stakes in India’s Biggest Oil Refineries
AP Photo/ Asia & Pacific12:15 24.10.2017Get short URL
Chinese oil firms’ interest in picking up stakes in global oil firms like Saudi Aramco and Rosneft, which have or are going to have stakes in India’s biggest oil refineries, is being seen as China’s attempt to enter India’s oil sector indirectly.
New Delhi (Sputnik) — Anticipating a major surge in the stakes of global firms in India’s energy sector, Chinese oil and gas firms are spinning a plan to take an indirect entry into India’s biggest oil refinery. Last week, Chinese state-owned oil firms PetroChina and Sinopec had written to Saudi Aramco seeking a 5 percent stake in the company, which is soon going to be listed on exchanges based in London and New York.
The development comes a few days after Saudi Aramco’s president and chief executive officer, Amin Nasser, exhibited a keen interest in the 60 million ton oil refinery that India’s state-owned firms — Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd — are setting up at a cost of approximately $40 billion on the western coast of the country.
“Saudi Aramco is a very big company. If Chinese firms buy a stake in Saudi Aramco, it would have a minority stake only and it will not have much impact on India. Oil firms from Gulf countries already have a stake in American companies such as Exxon Mobil and BP. I do not think a minor stake of Chinese will have any threat to India,” SC Tripathi, a former oil and gas secretary, told Sputnik.
Apart from Saudi Aramco, Chinese firm CEFC China Energy is also in the process of pumping in approximately $9 billion into Russia’s Rosneft. Earlier this year, Rosneft had completed the purchase of a 49.13 percent stake in India’s Essar Oil, which has a 20 million ton refinery in Jamnagar. After the completion of the CEFC-Rosneft deal, it is estimated that the Chinese firm will have 7 percent stake in the Jamnagar refinery, which is India’s biggest private oil refinery.
Meanwhile, despite the recent border standoff, India’s Ministry of Home Affairs denied charges of hindering security clearances for Chinese firms aiming to directly enter into the Indian oil sector through the foreign direct investment route. In the last three years, there has been a 37 percent increase in Chinese investments in India, including in the sensitive sector of telecom.