Hi,
Iam not an expert but from Immigration guide extracted few line which is clear to understand.
Visa Office requested for the processing of your application: You must select and write the name of the Visa Office which serves:
# your country of nationality; or
# the country in which you are residing, provided that you have been lawfully admitted to that country for at least one year.
Important
Do not select the CIO in Sydney. If you do, your application will be returned to you and you will need to reapply.
Do not select a visa office that does not serve a country as described above. If you do, your application will be returned to you by the visa office and you will have to reapply.
For example:
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You are an Indian National and working in Middle East (Saudi Arabia)
You can select your visa office either New Delhi / London (Visa office for Saudi Arabia).
Regard's