As oil giant Saudi Aramco reviews plans to expand at home and abroad in face of sharply low oil prices and heavy dividend burden, one of the projects that its likely to face the axe or the pause button from the oil major may be its proposed investment in a $44 billion mega refinery project at Ratnagiri in Maharashtra.

Sources familiar with the development said that hit hard by Covid-19-induced demand suppression and lower oil prices, Aramco is reviewing several of its investment projects globally, and the Indian project involving a 50:50 partnership between Indian state-run oil companies and Aramco/Adnoc has been included in it. This would mean that the company would either indefinitely suspend planned investment or press the pause button for now and review the decision once the market improves.

When contacted Aramco said: "The company does not comment on rumours or speculation. We continue to explore potential growth opportunities in Asia including India and will make appropriate updates as and when necessary."

Sources, however, said Aramco has already made its stand clear on refinery investments in China and a plant in Texas, USA. It is also going slow on its proposed investments in Pakistan. In India too, in the absence of any firm investment commitment from Saudi Aramco and other investors, the privatisation plan for state-owned refiner BPCL has been postponed thrice so far.

But the company at least is confident about its proposed investment in a deal involving buying a $15 billion stake in Reliance Industries' oil-to-chemical business but has pressed pause on other projects.

In an earlier response to an IANS query given last month, Aramco had said: "We are still engaging in discussions with Reliance Industries and will make appropriate updates as and when necessary." The company had also given an indication to this effect while giving out details of its financial earnings.

Oil companies globally are protecting cash as margins are expected to be tight for a long time with Covid-19 severely denting demand and keeping oil prices low for a longer duration.

Reports suggest that Aramco is also financially burdened this year as it has pledged dividend to investors during its IPO last year. The expected $75 billion dividend payout means that the company may need to sacrifice about $25 billion worth of investments this year. This would mean turning off the tap on several investment projects within Saudi Arabia and abroad.

But the company continues to keep a list of countries where it would make strategic investments to capture a larger market share in India, the world's third largest oil consuming nation.

Despite the concerns for the oil market, analysts have said Aramco was better prepared to weather market volatility, owing to its size and scale, its low cost of production and solid free cash flow generation in a weak oil price environment. This is good news for its investment plan for Asia..