Saudi-Indian Bromance Gets Complicated

The India-Saudi relationship was historically a finely poised balance of mutual interests despite all contradictions. Its glacial pace had an inner logic — don’t push too hard, as life is real. But the Modi government quickened the pace — probably with an eye on Muslim politics.

Petrodollar recycling is largely about the bulk of petrodollar surpluses that is held either in US treasury bills and other short-term instruments or in American and Western European banks. But in the Saudi-Indian context, it is about the international spending or investment of Saudi Arabia’s sovereign wealth accumulated from the country’s oil exports.

Its potential to create incredible relationships of interdependency among elites heavily influenced by government-level decisions and based in capital flows remains untested. Unsurprisingly, the movers and shakers among the elites assume larger-than-life profile. The former Saudi Oil Minister Khalid al-Falih was a titanic figure.

Out of India’s tango with Al-Falih, two mega projects were conceived. The first is the proposed 60 million tonnes-a-year refinery-cum-petrochemical joint venture in Ratnagiri district in Maharashtra (announced in June 2018), estimated at US$ 44-billion and involving an Indian consortium comprising state-owned companies — Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation Ltd. — who will jointly own 50 percent of the mega project with Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) owning the rest 50 per cent.

The second is a reported deal in the pipeline between Reliance Industries and Saudi Aramco, which was forecast by Mukesh Ambani last month, who termed it as one of India’s largest foreign direct investments till date. While addressing shareholders at the 42nd AGM of the company in Mumbai on August 11, Ambani disclosed that Saudi Aramco intended to acquire a 20 per cent stake in Reliance’s oil-to-chemicals business.

To be sure, Reliance Industry’s shares surged overnight by as much as 11 percent following Ambani’s dramatic disclosure of plans to sell stakes in the firm’s oil and chemicals business to the Saudi oil giant Aramco. Analysts estimate the surge in the shares of Reliance Industries as its biggest intraday jump since 22 February, 2017 and that the rally in the stock may have helped RIL reclaim a Rs 8 lakh-crore market capitalisation. Awesome, indeed!

There has been much media hype in India about the two projects involving Saudi Aramco, but the Saudi side has been reticent. The Ratnagiri project is bogged down in land acquisition problems. And it now transpires that the tectonic plates are shifting in the Saudi oil ministry and Saudi Aramco.

On August 30, Saudi King Salman bin Abdulaziz Al Saud issued royal decrees that included dividing the Energy, Industry and Mineral Resources Ministry, previously overseen by Oil Minister Falih, into two ministries — the Energy Ministry and the Industry and Mineral Resources Ministry. For the latter which controls oil industry, King Salman chose Saudi private sector investor and businessman Bandar Alkhorayef to lead.

On September 2, it came to be known that Al-Falih was being summarily replaced as chairman of Saudi Aramco by Yasir al-Rumayyan, governor of the Public Investment Fund, the kingdom’s sovereign wealth fund and its primary investment vehicle.

On September 7, King Salman issued another royal decree altogether replacing Al-Falih as the energy minister. The successor is a member of the royal family — none other than Prince Abdulaziz bin Salman, a son of the king. Abdulaziz has had decades of experience with the OPEC.

Khalid Al-Falih
Khalid Al-Falih

Now, Saudi Arabia never had a royal as its energy minister since 1960, given high sensitivity due to concerns that it might create about balance of power in the dynasty. The stability of oil-related decisions in Saudi Arabia has come under limelight.

Al-Falih was not particularly close to the powerful Saudi Crown Prince Prince Mohammed bin Salman (MbS) and had reportedly pushed back on the Aramco IPO plan. By removing him from the top echelons, Aramco, the world’s most profitable company, is being prepared for what may be the biggest initial public offering ever.

Clearly, MbS has taken direct control of the Aramco and his priority is toward putting the company’s IPO back on track. MbS’s ‘big picture’ —Vision 2030 — is about shaking up traditional Saudi society by introducing reforms, which no doubt has a visionary side to it, and he is almost certain to turn to futuristic investments out of the Aramco rather than be in more traditional or conventional investments.

Put differently, MbS is re-calibrating the outsized role that oil plays in the Saudi economy. He is credited with a famous remark in 2016 that Aramco “is a company that has a value – an investment. You must own it as an investment. It should not be owned as a primary commodity or a major source of income.” Aramco accounts for about 67% of the government’s revenue.

This is where Aramco’s Indian partners have reason to be deeply concerned. Al-Falih has known Ambani for many years, and even travelled to Udaipur last December to attend the pre-wedding festivities of Ambani’s daughter’s marriage. And Al-Falih, who served at the Aramco for three decades and was a gifted mediagenic personality well versed in international diplomacy and business relations, has his wings clipped in a hugely significant shake-up. (See the analysis in Oil Price magazine entitled The Silent Power Struggle Within Saudi Arabia.)

Apparently, MbS felt frustrated with Falih’s pace in pursuing opportunities for developing the non-oil sectors. And Al-Falih’s removal forms part of a profound policy overhaul.

Will India remain an investment priority for Saudi Aramco? Our lackadaisical performance on the Ratnagiri project has dented our credibility. Meanwhile, as grandstanding before the domestic audience, we began foolishly bragging about Saudi-Emirati investment plans as indicative of the sheikhs “distancing” from Pakistan, including on Kashmir. The fantasies are dissipating.

Source: The Indian Punchline

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  1. India pulling a Turkish move…..

    Swiss Power Mandates, out in Public Domain:

    Iran in Egypt

    Switzerland has been representing Iranian interests in Egypt since 1979.

    USA in Iran

    Switzerland has been representing US interests in Iran since 1980. Its Foreign Interests Section in Tehran handles all US consular affairs in Iran including passport applications, changes in civil status or consular protection for US citizens.

    The protecting power mandate dates back to the 1980 hostage crisis when the US broke off relations with Iran following the country’s self-proclamation as an Islamic republic, and students occupied the US embassy in Tehran taking a number of US diplomats hostage.

    Russia and Georgia

    Switzerland has been acting as protecting power for Russia in Georgia since the end of 2008 and for Georgia in Russia since the beginning of 2009. Both states use their own staff to carry out administrative, technical and consular matters on the ground but the foreign interest sections fall under Switzerland’s protection.

    Georgia broke off diplomatic ties with Russia after the August 2008 war and Russia’s recognition of the breakaway regions of Abkhazia and South Ossetia.

    Iran and Saudi Arabia

    Switzerland represents Iran’s interests in Saudi Arabia and Saudi Arabia’s interests in Iran. It signed treaties with both countries to this effect at the end of October 2017. The mandate covers consular services.

    Saudi Arabia broke off relations with Iran at the beginning of January 2016.

    Media release, 25.10.2017 – Good offices: Switzerland takes on protecting power mandate for Iran and Saudi Arabia

    US and Cuba

    Switzerland represented US interests in Cuba between 1961 and July 2015, and continues to represent Cuba in the US (since 1991).

    Swiss protecting power mandates for the United States and Cuba, web dossier
    A centuries-old tradition

    Switzerland first acted as a protecting power in the 19th century when it looked after the interests of the Kingdom of Bavaria and the Grand Duchy of Baden in France during the Franco-Prussian War in 1870-71. It also carried out protecting power mandates during the First World War. During the Second World War Switzerland became a protecting power par excellence on account of its neutrality, representing the interests of 35 states – including the major warring powers – with over 200 individual mandates. The number of mandates between 1948 and 1973 has fluctuated between four and twenty-four.



    Indian Muslims are happy being butchers,craftsmen,cobblers,tailors,farmers,spinners … and some are into the mafia supply chain. Over the last 74 years,Osmosis has taken its toll on the “Indian” Muslims. Now these “Indian Muslims” pray to Rama,partake in Diwali, and even pray at Temples ! What is their evolution,in the last 1300 years ? And what is the cause – it is that they are in a nation,FULL OF HINDOOS – and that is the TRUTH.

    Are these Muslims ? Is this Islam ? They also claim that they are the sons of RAMA,and that RAMA IS A GOD,or better still,A PROPHET ! These weasels EQUATE Rama with ALLAH,and THE PROPHET !They claim that Shiva was a Muslim ! They find ingenious interpretations of the Quran and the Hadeeth,to justify their actions ! They claim that the Prophet (PBUH) called Krishna,a PROPHET !

    The latest is a SHIA in India – Mr Rizvi,who has filed a PIL in the SC,to ERASE 27 VERSES FROM THE KORAN,FOR TEACHING IN MADRASAS ! And the PIL is admitted ! It started with the Babri Masjid Judgement !

    Then there are Sunnis like Asad Owaisi – who THINK THE CONSTITUTION WILL SAVE THE INDIAN MUSLIMS ? What is the syndrome here ? When all hope is lost,the Indian Muslims believe a UTOPIAN RELIC, written by a man,who when it came to the CRUNCH,did not stand up to Gandhi ! These people THINK THAT THE VOTING BUTTON WILL “EMPOWER THEM” !!

    A separate nation of the Dalits and Muslims,was POSSIBLE,only in 1947 – and Ambedkar did not have the guts to act. He was sent on a UK education by a bania and was conned by a Gujarati Bania (Which is Gandhi!)

    What about the CAA/NRC ? It will restart soon ! It is a progression of shockwaves by the Chaiwala Brigade,to innure and numb the Muslims to shock ! The Nazi Methodology ! The fools are still dreaming of a SECULAR INDIA !

    Rewind to Nehru,Rajiv and Indira Gandhi – and then juxtapose with Bhagalpur and Nellie and ….STILL, no one thought that the Chaiwala Brigade will rule India – and it has happened !

    BUT 1 MAN SAW IT IN THE 1930s – and the name of that GENIUS was JINNAH,as DID not have the Core Indian DNA – which is Y he did not even marry an Indian (as in an Indian DNA).Indian Muslims being mostly.Dalit converts – are still slaves,and the Brahmin Converts,are weasels and easily corrupted by the Chaiwala Brigade.They talk and talk and do nothing ! Even in Kashimir,did the state assembly pass or even move a resolution for independence ? The Fools actually believed that Art 370 will last forever ! A Sign of an Indian on a paper,is not worth TP !

    Right Wing Hindooism,is the DNA of the Hindoo nation.Only a fool would think otherwise ! Every 5 years,Chaiwala will find some new drama,to con the 100 crore Hindoos and Quasi Hindoos !

    Lastly,all these “INDIAN” Muslims who died for Bharat Mata ! For what ? Should a “MUSLIM” die for the Indian Constitution or shoot down Indian civilians or kill soldiers of ANOTHER NATION – due to the mistakes of THE INDIAN LEADERS.BABOOS AND MILITARY LEADERS ? Y ? What Islam is that ?

    Indian Muslims are surrounded from all sides – except Kashmir,Bengal and the North East and Kerala – and these are the potential Islamic nation states.The rest are doomed ! They will be wiped out !

    Allah will NOT save them – because they CANNOT SAVE THEMSELVES.Many centuries ago,a man called Salahdin,said the same thing,about the state and fate of Arabs.dindooohindoo


    Only doom lies ahead for the Indian Muslims !

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