Lifting of sanctions on Iran has opened up new investment opportunities for India especially in the area of energy and seen as a big positive that will boost bilateral ties between the two nations.
India-Iran bilateral relations have withstood the tests of time and lifting of sanctions is an important milestone in Iranian history. Investment by Indian companies could be anywhere in the range of upto $ 20 billion, India’s Minister of State (I/C) for Petroleum and Natural Gas , Dharmendra Pradhan said during his visit to Iran from 9-10 April 2016.
Pradhan met Minister of Petroleum Bijan Namdar Zanganeh, Senior Advisor to the President of Iran on Free Trade Zones Akbar Torkan and Governor of Iranian Central Bank Dr Valliolah Seif.
Both sides also discussed the developments regarding Farzab-B gas fields and expressed confidence on concluding an agreement at the earliest. The issue relating to payment of dues by Indian refineries to Iran towards purchase of crude oil were also discussed where Pradhan conveyed that India was committed towards making payments as and when banking channels, acceptable to both sides, were available.
Indian companies are keen to set up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through Joint Venture between Indian and Iranian public sector companies or with private sector partners. Pradhan has sought the intervention of the Iranian authorities for allocation of appropriate and adequate land in the SEZ.
The minister has also requested the Iranian side for favourable treatment in the pricing of gas for India and also supply of rich gas at competitive price and on long term basis for the life of the joint venture projects that Indian companies are interested in setting up. Competitive gas pricing was crucial in making the projects attractive for the prospective investors. He also expressed India’s interest in setting up a LNG plant and a gas cracker in the Chabahar port.
Pradhan also conveyed to the Iranian side that both countries must expand the basket of oil and gas trade. He expressed India’s interest in importing LPG from Iran and said that companies from both sides could discuss setting up an extraction plant in Chabahar, if required. Both sides agreed to continue examining various means of evacuation of gas such as LNG, including through the proposed Iran-Pakistan-India pipeline.
Pradhan’s visit comes nine years after the previous visit by an Indian Minister of Petroleum & Natural Gas. It was the first visit of an Indian minister to Iran after sanctions were lifted this January.
Pradhan was accompanied by senior officials from his Ministry and also from Department of Petrochemicals, Department of Fertilizers, Department of Economic Affairs, apart from CMDs/MDs from Central Public Sector Oil and Gas companies. Representatives of private sector companies involved in petroleum, petrochemicals and fertilizers sectors also travelled along with Pradhan as part of FICCI delegation.
After Iran, Pradhan, Minister visited UAE on 12th April, where he had meetings with Suhail Mohammed Al Mazrouei, Minister of Energy of UAE and Sultan Jaber, Minister of State & CEO of ADNOC. He also interacted with the Indian professionals working in the oil and gas sector in Abu Dhabi. UAE supplies nearly 8% of Indian crude imports and Pradhan pitched for maximising the term volume for Indian companies which import crude and LPG from UAE on favourable terms.
During his visit, Pradhan acknowledged the importance of energy sector as a central pillar of India-UAE economic relationship and noted the increasing bilateral trade in this sector. He also highlighted the interest of Indian companies to participate in prospective exploration rounds in the UAE and in third countries. Pradhan also discussed investment opportunities available in several major hydrocarbon sector projects in India including ONGC Petro Additions Ltd, Bharat Oman Refineries Ltd, Petchem complex in Andhra Pradesh, West Coast Refinery and Ennore LNG Terminal.
The visit of Pradhan led delegation to UAE was a follow up of Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Suhail Mohammed Al Mazrouei, Minister of Energy of UAE to India in February 2016. He was accompanied by senior officials from his Ministry and CEOs of Public Sector Oil and Gas companies.
After UAE, Pradhan made a one-day official visit to Riyadh, Saudi Arabia on 14th April, 2016. During his visit, he held meetings with Vice Minister for Petroleum Prince Abdulaziz bin Salman bin Abdulaziz al Saud and Health Minister & Chairman of Aramco Khalid Al Falih. He also visited the headquarters of SABIC, the second largest petrochemical company of the World.
The visit came close on heels of the successful visit of the Prime Minister Narendra Modi to Saudi Arabia on April 2-3, 2016. During the visit of the Prime Minister, ways to enhancing cooperation in oil and gas sector was one of the key issues discussed with the Saudi leadership. Pradhan visit is a follow up to take forward the discussions regarding various investment proposals in areas like oil, gas, petrochemicals, exploration and production, etc.
Pradhan shared details of various investment opportunities in India in downstream and upstream sectors. He also elaborated on the Hydrocarbon Exploration Licensing Policy (HELP) and Discovered Small Fields policy and invited the Saudi side to invest in Indian upstream sector.
The Saudi side also provided details of investment opportunities for Indian companies in their country. Both sides agreed to conclude discussions regarding concrete investment proposals in a time-bound manner. They also agreed to appoint high level negotiation teams for various projects which would be periodically reviewed at Minister level.
Pradhan was accompanied by Ambassador of India, CEOs of ONGC Limited, Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
Saudi Arabia has been the largest supplier of crude oil to India. Saudi Arabia supplied about 40 MMT of crude to India during 2015-16, accounting for about 20% of total crude imports. India also imported about 3 MMT of LPG which is around 28% of our total LPG imports.
Currently, Writing a Book for Penguin India Titled Greased Pole:How Politics and Lobbying Stifled India’s Energy Dreams. The author can be reached on firstname.lastname@example.org (9810661825)
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