But the Twitter-happy universe in the world of petroleum was in for some shock when Saudi Arabia’s energy minister Khalid al-Falih – who has a reputation for weighing his words carefully – chose to tweet about his recent meeting with Mukesh Ambani, the richest Indian tycoon. Ambani owns Reliance Industries Ltd (RIL), which manages the world’s largest refinery complex at a single site. Al-Falih said they had discussed “joint investment opportunities and cooperation in petrochemicals, refining and telecoms” in their two countries.

The seemingly innocuous tweet has ignited a storm of speculation. Al-Falih is a familiar name in India and is believed to be the brain behind the Saudi decision to invest in the proposed 60 MTPA mega refinery on the west coast in the state of Maharashtra. Aramco of Saudi Arabia has already committed to invest in the PSU-sponsored mega refinery along with ADNOC of UAE. So, what was the reason to explore opportunities in the refining business with the Reliance boss? The buzz in industry is that Al-Falih’s tweet is a sign that Saudi Arabia is increasingly exasperated by the delay in finding a location for the mega refinery. The Government of Maharashtra has abandoned the process of acquiring land for the refinery at Ratnagiri district, the originally proposed location, following stormy protests by the farmers. The process cannot be revived at least until the general election, which is scheduled for mid-2019, is over. Even if the BJP-led alliance is voted back to power in the state, there is no guarantee that its hostile coalition partner, the Shiv Sena, will support the refinery project.

The Saudis are not accustomed to India’s tortuous process of obtaining permits and the tardy execution of projects. The problems with land acquisition for showcase projects have magnified after the farmers’ agitation of 2007 at Singur in the state of West Bengal against land acquisition for Ratan Tata’s dream project for the Nano. Political parties and their leaders do not want to ruin their political fortunes by forcibly acquiring land from the farmers.

There is a perception within the section of the industry that the logjam over land acquisition for the refinery project would not have arisen if Indian Oil Corporation (IOC) been allowed to have its way in setting up the refinery project as per the original proposal. IOC was supposed to be the leader of the mega refinery with a 50 per cent stake with the remaining stake to be shared equally between BPCL and HPCL.

Saudi Aramco entered the scene at the instance of India’s political leadership. Saudi Aramco was given a 50 per cent stake in the refinery. It later roped in ADNOC and parted with half the equity stake that it had been granted in the project. India welcomed the move as it had very friendly relations with the UAE.

The Modi government’s enthusiasm for foreign investment, particularly from a country like Saudi Arabia which so far shied away from investing in India, meant that IOC was inadvertently cut to size. Being a public sector company, it had to fall in line. IOC is not known to be comfortable in a setup where it is not the leader. It is an acknowledged fact that IOC enjoys tremendous clout at every level in the country and has a way of managing things without precipitating a crisis. Does this mean that IOC hasn’t been totally involved in the mega refinery project after the induction of foreign partners? There is no documentary evidence to substantiate such a view. There could be others in the country who empathise with IOC’s plight.

But the frustration that one senses in Al-Falih’s tweet does not presage that Saudi Aramco is ready to drop out of the mega refinery project. It will certainly wait for some more time. But the tweet is a warning to the Indian leadership that it is running out of patience. Saudi Aramco initially talked about entering the fuel retailing market in India. It is keen on marketing rights which need not be for retailing transportation fuels such as petrol and diesel. It may be interested in marketing select products like LPG. But the stalemate over the refinery project has created some uncertainty over the marketing plan as well.

It is unlikely that RIL will opt for a joint venture refinery with Saudi Aramco in India. If RIL is interested in enhancing the capacity of its refineries at Jamnagar on the west coast, it can do so very well on its own. Not many in the petroleum sector know that the leadership of Saudi Arabia has very friendly relations with Mukesh Ambani. His views may have been sought on possible investments that the Kingdom intends to make in India. However, personal relations do not stand in the way of business deals. Mukesh Ambani’s RIL buys crude oil from the cheapest possible sources.

Saudi Arabia is now scouting for markets for their crude oil as well as petroleum products. The OECD market for crude oil is crumbling because of declining demand and the increase in global crude oil supplies, especially from the US. China and India are the two dominant markets. A tie-up with a major refiner like Reliance makes a lot of sense for Saudi Arabia. The talks may not revolve around a joint venture. RIL could jump at a bait that promises a lucrative crude oil supply deal with the Saudis.