The world’s third largest crude producer – Saudi Arabia, is seriously ‘courting’ India, which also happens to be Nigeria’s biggest crude market.
Saudi’s Crown Prince, Mohammed bin Salman, last week visited New Delhi where he met with India’s Prime Minister Modi, for crucial talks.
While much of the talks focused on curbing terrorism, the two leaders also deliberated on ways to form stronger economic ties between their countries.
In specific terms, Prince Salman stated that his country would be investing as much as $100 billion in India over the next two years.
“We expect the opportunities we are targeting in India in various fields to exceed $100 billion in the coming two years.”
Areas of interest for the Kingdom cut across sectors such as infrastructure, manufacturing, and agriculture. Yet, Saudi Arabia also wants to invest in India’s energy/oil industry.
Nature of Saudi Arabia’s investment in India’s oil and gas
Already, a leading Saudi oil and gas company – Saudi Aramco – is in talks with Reliance Industries Limited over a potential partnership.
Reliance Industries Limited is an Indian conglomerate, with huge stakes in the country’s energy sector.
A potential partnership between the companies could come in the form of refineries being constructed in India.
Note that Saudi Aramco is also negotiating similar opportunities with other Indian companies.
What does this mean for Nigeria’s crude export to India?
The Saudis’ potential investments in India’s refineries would help the country lock down the Indian market for its crude export.
In other words, possible investments in India’s energy sector by Saudi Arabia could ultimately cause a decline for India’s demand for Nigeria’s crude.
Once again, India is one of Nigeria’s biggest crude markets. This has, as a matter of fact, been the case for sometime now.
According to recent data from the National Bureau of Statistics (NBS), Nigeria exported crude worth N719.2 billion to India in Q3 2018. This, along with the N37.7 billion worth of natural has exported to the country, makes it Nigeria’s biggest crude export market during the period under consideration.
But this may change if Saudi Arabia manages to clinch the deals its Crown Prince said are in negotiations.
In light of this possibility, therefore, the important question is whether Nigeria is prepared for such development.
Nigeria’s economy depends largely on crude export to stay working.