Oil & gas industry giants Saudi Aramco and Abu Dhabi National Oil Company have recently announced that they will be jointly investing in the value chain of India’s energy sector. Reportedly, the duo has signed a MoU (memorandum of understanding) in this regard that claims both the firms to acquire a stake in the Ratnagiri oil refinery & petrochemical unit in the state of Maharashtra, worth USD 44 billion, with a processing capacity of 1.2 million barrels per day.

Sources reveal that ADNOC and Saudi Aramco will jointly hold 50% stakes in the project that is scheduled to come on line by 2025. The remaining 50% shares will be held by Indian oil industry conglomerates such as Bharat Petroleum Corporation Limited, Indian Oil Corporation, and Hindustan Petroleum Corporation Limited.

The investment comes as a result of the growing ties between the UAE and India, that is looking to strengthen its energy sector in the recent years, cite sources familiar with the matter. Indian oil minister Dharmendra Pradhan revealed in a statement that originally ADNOC was to sign the deal during his visit to UAE in May but the event got postponed. The energy minister moreover deems the combined investment by Saudi Aramco and ADNOC to be the biggest investment by any overseas company in India’s oil & gas industry.

The inking of the deal also coincides with the UAE Minister of Foreign Affairs & International Cooperation, Shaikh Abdullah Bin Zayed Al Nahyan’s visit to India.

It has also been reported that Saudi Aramco and ADNOC are determined to take a step further into India’s entire value chain by forming partnerships with the local companies who recognize their markets well.

Industry experts deem that with oil demand slated to hit 10 million barrels per day by 2040, this move is certain to help India with the access to affordable and adequate oil in the ensuing years.