New Delhi, Sep 10 (IANS) The dramatic changes in Saudi Arabias political administration is expected to have global ramifications, given that energy is the edifice of the gargantuan Saudi commercial empire.
In yet another Palace coup, the Kingdom''s veteran Energy Minister Khalid al-Falih has been sacked and replaced by King Salman''s son Prince Abdulaziz bin Salman, while the Deputy Energy Minister has also been removed.
For India, the changes are even more keenly watched as the country gets more than 80 per cent of its oil imports from the Organisation of Petroleum Exporting Countries (OPEC) headed by Saudi Arabia, which is also the country''s second biggest supplier of crude.
As luck would have it, Union Petroleum Minister Dharmendra Pradhan met the new Saudi Energy Minister Prince Abdulaziz bin Salman in Jeddah on Monday, kicking off his tour of Saudi Arabia, Qatar and the UAE.
In a tweet, Pradhan said that the new Saudi Energy Minister reiterated Saudi Arabia''s commitment to remain a reliable and sustainable partner in hydrocarbon supplies and also on Saudi investments in India.
The shakeout at Saudi Arabia''s energy ministry is the direct result of delays in concluding the much-talked about initial public offer (IPO) from the state-run Aramco, the world''s largest and most valuable oil company.
Aramco had decided to float around 5 per cent of the company in what could potentially have been the world''s biggest stock sale that could have raised up to $100 billion based on the $2 trillion valuation of the company.
But the IPO has failed to meet its 2018 deadline due to prevailing low oil prices that has also pushed investors to debate whether Aramco is really worth that much.
Experts tracking the development said that failure to conclude the Aramco IPO could have been one of the reasons why Khalid al-Falih was removed as the Energy Minister, a position he held since 2016. He was earlier removed as the Chairman of Aramco.
It is widely speculated that dissatisfaction with Khalid al-Falih grew over the continuing low oil prices despite the Kingdom agreeing to a continued oil output cut.
For Crown Prince Mohammed bin Salman, the Aramco IPO forms the cornerstone of a reform programme that aims to wean the Saudi economy off its reliance on fossil fuels.
But with the changes in place in Saudi Arabia where the Royal family is now in full control of this important ministry, it needs to be seen whether there would be realignment of the Kingdom''s energy policy.
This would be of interest to India as Prince Abdulaziz''s next course of action would be keenly watched, particularly with respect Aramco''s proposed investment plans and its intentions to foray into greenfield projects in markets like India.
Abdulaziz will also participate in the next meeting of oil cartel OPEC on September 12 that is to take up the issue of continuing further production cut to stabilise oil prices.
Aramco and India''s largest private sector corporate entity Reliance Industries Limited (RIL) have agreed to form a partnership where the Saudi company will invest in the Indian firm for 20 per cent stake in its oil-to-chemical business.
Though the deal has been announced by RIL, it needs to be seen whether it would now be renegotiated as differences had earlier surfaced over the valuation that delayed the process.
"We continuously evaluate new business opportunities worldwide in our efforts to advance our global downstream growth strategy. As part of that strategy, we have signed a preliminary non-binding Letter of Intent (LoI) with Reliance Industries regarding the possible purchase of a stake in Reliance''s refining, petrochemical and fuels marketing business in India," Saudi Aramco said in response to an IANS query, stating its official position on the deal.
It added: "Under the non-binding Letter of Intent, the companies have agreed to proceed to the next steps of negotiations and will make an announcement should a binding agreement be reached."
RIL did not respond to the story till the time of releasing this report.
Besides the proposed investment in RIL, Aramco has also indicated plans to enter India with fuel retailing, while also putting its equity in the $44 billion refinery and petrochemicals project being implemented by Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) in Raigad district of Maharashtra.
RRPCL is a joint venture between Saudi Aramco, Abu Dhabi National Oil Company (Adnoc), and three state-run oil marketing companies (OMCs) -- Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL).
Saudi Aramco and Adnoc will jointly own 50 per cent of the refinery, with the remaining 50 per cent being owned by the Indian OMCs.
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Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: IANS