Saudi Aramco discussing investments in India’s Reliance Industries

Saudi Aramco CEO Amin Nasser leaves after attending the Saudi-India Forum in New Delhi, India, on Wednesday. (Reuters)
Updated 21 February 2019
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Saudi Aramco discussing investments in India’s Reliance Industries

  • World's biggest oil company targets petrochemicals
  • India is a top investment priority for Saudi Arabia

NEW DELHI: Saudi Aramco’s CEO Amin Nasser said on Wednesday that the company is in talks with India’s Reliance Industries for possible investments and is seeking other opportunities in the country.

Saudi Aramco signed an agreement in April with a consortium of state-owned Indian refiners to participate in a $44 billion refinery project on the country’s west coast.

“We are looking at additional investment in India so we are in discussions with other companies as well, including Reliance and others,” Nasser said.

“We are looking at it. We are not limited to that investment which is the mega refinery,” Nasser said, referring to the west coast project, which would process 1.2 million bpd of crude and produce 18 million tons per year of petrochemicals.

Nasser is part of the entourage traveling with Saudi Arabia’s Crown Prince Mohammed bin Salman, who is in India for a one-day visit.

During his visit, the crown prince met with chairman and managing director of Reliance Industries Mukesh Ambani.

In their meeting, they reviewed promising investment opportunities.

The meeting was also attended by Minister of Commerce and Investment Dr. Majid Al-Qasabi, Minister of Energy, Industry and Mineral Resources Khalid Al-Falih and Public Investment Fund Supervisor Yasir Al-Rumayyan.

Saudi Arabia's Crown Prince Mohammed bin Salman in a meeting with Reliance Industries chairman and managing director Mukesh Ambani in New Delhi during the crown prince's tour of Asia. (SPA)

Reliance Industries is India’s biggest refining and petrochemicals company and runs a 1.4 million barrels per day (bpd) refinery in western India. It plans to expand the capacity to 2 million bpd by 2030, according to plans shared with the Indian government.

Saudi Arabia, the world’s biggest crude oil exporter, is keen to expand further into oil refining and petrochemicals.

India would provide a fast growing market for oil and fuels and is already a steady buyer of Saudi oil.

“India is an investment priority for Saudi Aramco. India takes from us almost 800,000 barrels a day and by 2040 India’s total consumption will be around 8.2 million barrels per day,” Nasser said.

India is currently world’s third-biggest crude oil consumer with demand of 4.7 million bpd, according to government figures.

However, Aramco is already facing delays for the refinery project, planned for the western state of Maharashtra, as thousands of farmers have refused to surrender land for it.

Reuters reported on Tuesday the Maharashtra government is looking to move the refinery location.

Yousef Al-Benyan, the chief executive officer for SABIC, the Saudi Arabia-based petrochemical company that is the fourth largest in the world, said SABIC wants to expand its business and presence in India.

(With Reuters)


Lufthansa announces overhaul of budget carrier Eurowings

Updated 24 June 2019
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Lufthansa announces overhaul of budget carrier Eurowings

  • Lufthansa cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16
  • Eurowings’ long-haul business would be managed by Lufthansa in the future

BERLIN: Lufthansa on Monday announced a turnaround plan for Eurowings in which the budget carrier will focus on short-haul flights and seek a 15 percent cut in costs by 2022 in the hope of returning to profit.
The German airline cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16. Eurowings’ revenue was also forecast to fall sharply in the second quarter.
Lufthansa said its Eurowings fleet would be standardized on the Airbus A320 family and it would seek to boost productivity at Eurowings by limiting itself in Germany to one air operator’s certificate.
Brussels Airlines — the Belgian national flag carrier which Lufthansa took control of in 2016 — would not be integrated into Eurowings, Lufthansa said. A turnaround plan for Brussels Airlines will be announced in the third quarter.
Lufthansa also said it would start pegging its dividend payout ratio to net profit in the future to give the group more flexibility. It would pay out a regular dividend of 20 percent-40 percent of net profit, adjusted for one-off gains and losses.
Lufthansa said Eurowings’ long-haul business would be managed by Lufthansa in the future.
Carsten Spohr, Chief Executive Officer of Lufthansa, said Monday’s announcements sent “a clear signal that this company cares about its shareholders and tries to create value for them.”
Lufthansa said its Network Airlines — made up of Lufthansa, Swiss and Austrian Airlines — would aim to use innovations in sales and distribution to make a contribution to increasing unit revenues by 3 percent by 2022.
Network Airlines will aim to reduce unit costs continuously by 1 to 2 percent annually, the airline said.