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India, Saudi Arabia discuss energy investments
Wednesday, 05 January 2005, 20:30 IST
NEW DELHI: India and Saudi Arabia Wednesday expressed their desire to invest in each other's petroleum sectors and to devise mechanisms to ensure energy security, oil price stability and sustained supplies in the Asian region.
"Opportunities exist to strengthen ties in investment between India and Saudi Arabia," Ali Al Naimi, the Gulf country's oil minister, told reporters ahead of the first roundtable of Asian oil buyers and sellers here Thursday.
"It is this commitment for the continuation of our dialogue which is of utmost importance," he said after calling on Indian Prime Minister Manmohan Singh and an hour-long meeting with Petroleum Minister Mani Shankar Aiyar.
Al Naimi said Saudi Arabia, which has 30-year oil supply contracts with several countries, was keen on entering into a similar arrangement with India. "Our biggest concern is oil security and transportation," he noted.
On the investment side, the visiting minister said opportunities existed for Saudi Arabian oil companies to invest in India's upstream, midstream and downstream projects, and to strengthen economic ties between the two countries.
"We are very keen to invest in India. But the oil exploration sector is very expensive in India and we would not at this juncture venture into exploration."
Al Naimi also brought a letter on behalf of his government suggesting the Saudi crown prince would visit India soon and expressed sympathy for the large-scale destruction and casualty after the Dec 26 tsunami disaster, officials said.
An invitation was also extended to Aiyar to visit Saudi Arabia during end-March or early April.
Aiyar said India was interested in pipeline and refinery installations in Saudi Arabia, since Indian companies had the technology for these areas.
While the private sector is equally interested in opportunities in Gulf countries, a high-level delegation of the Oil and Natural Gas Corporation and its overseas arm would visit Saudi Arabia on an exploratory mission, he said.
A strong team of the state-run firm would study a range of prospects across the value chain, Aiyar said, calling for greater commercial interaction between firms of the two countries, rather than inter-governmental exchanges.
At the roundtable Thursday, four principal buyers -- China, South Korea, Japan and host India -- are expected to focus on issues like supplies, long-term contracts, technology transfers and investment cooperation.
The major West Asian oil producers participating in the roundtable include Saudi Arabia, Iran, Qatar, Oman, the United Arab Emirates and Kuwait, along with Malaysia.
The Indonesian oil minister cancelled his trip in view of the tsunami disaster.
"It is a historic forum where all significant buyers and sellers would meet," Aiyar said.
"There is no set agenda for the roundtable but it is a forum for exchange of views. The conclusion, if any, would be known at the close of the roundtable."
An oil ministry official said: "Mutual investments in exploration by consuming countries and refining and marketing by producing countries could help to enhance stability and security for these countries."
Organised in cooperation with the International Energy Forum, the roundtable will have representation from the secretariat of the Organisation of Petroleum Exporting Countries (OPEC) and International Energy Agency (IEA).
The need for an Asian price benchmark, the issue of higher freight charges Asian countries have to pay that add up to import bills, and the need for a mechanism to tackle supply disruptions are expected to be discussed at the roundtable.
In recent months, Asian countries have benefited from the widening gap in prices between Brent crude that forms the European import basket and Dubai crude that India buys.
Instead of paying a premium on freight, Asian buyers in fact managed a discount compared to Western buyers, petroleum ministry officials explained.
"This phenomenon, which occurs not too often, has reduced the urgency for a resolution of the Asian premium issue, which will no longer be the highlight of the roundtable," an official said.
"But the need for an Asian benchmark for crude will still be stressed. There is an immediate need to develop the oil market to ensure correct pricing of both crude and products."
Source: IANS
Source: IANS