|
India's Stake in Iraqi Oil Part of Growing Involvement in Global Business
 |
|
President Saddam Hussain welcomes the Indian oil minister Ram Naik using Indian style of greeting. |
By IOL South Asia Correspondent
NEW DELHI, July 12 (IslamOnline)- India opened an office of its Oil and Natural Gas Commission (ONGC) last week in Baghdad, formally expanding its oil exploration to a crucial area in the Middle East. The office, representing the ONGC foreign business subsidiary ONGC Videsh Ltd (OVL), was inaugurated by the visiting Indian Central Minister of Petroleum and Natural Gas, Ram Naik.
Naik had a two-hour meeting with President Saddam Hussein, who in a "special gesture," allowed Indian export houses to be registered with the Iraqi ministry of trade. Naik, who seemed happy with his meeting with the Iraqi president, told reporters on his return in Mumbai, that this would boost the small and medium-sector manufacturers.
The minister, who returned from a meeting of the India-Iraq Joint Commission, said that Indian companies had got contracts worth $1.2 billion to export wheat to Iraq in exchange for crude oil. This is important to India's plan for long-term energy security.
India also sorted out a major problem with Iraq, which last year returned Indian wheat bought under the UN "food for oil" programme. Iraq has been reeling under U.S.-sponsored UN sanctions following its invasion of Kuwait in 1991. Iraqis rejected Indian wheat last year saying it was "Bunt-infested." India agreed to send wheat from states where Bunt disease has not reached.
Although the present deal involves only 1.5 million tons of crude oil from Iraq, India is keen on buying 5 million tons, subject to approval by UN Sanctions Committee, which must clear all such deals with Iraq.
Last year India ran into trouble with the US and Britain over its dealings with Iraq. India had offered a $25 million loan to Iraq for purchasing a thousand buses and other essentials from India. Later, India clarified that it would keep its dealings with Iraq confined to the rules imposed by the UN sanctions regime.
More significantly, India has a stake in Iraqi oil exploration. Iraq being the second most rich country in oil reserves, the Indian move makes sense in its search for long-term energy security and its growing stake in the international oil business.
Only recently India finalized an investment deal in the Sudanese oil industry amid protests from rebels who alleged the Sudanese government was using oil revenues to crush the "liberation" movement.
OVL is to explore oil in Abu Khema in southern Iraq. It is also working on the Sakhalin oil field project in Russia, its investment being $1.741 billion, for a 20 percent stake in Sakhalin-I project.
India has already signed memorandums of understanding with Algeria, Vietnam, Venezuela, Iran, Qatar, Oman and Iraq. Late last year, India signed another memorandum of understanding with Indonesia's national oil company, Petramine, to which Indonesian oil fields belong. Under the MoU India would be exploring oil in Indonesia.
|
|
|
