Strategic edge in West Asia: PM Narendra Modi to ink key oil pact today

PM Modi, who wants to cut India’s oil imports by 10 per cent by 2022, is steering efforts to buy foreign energy assets, taking advantage of low oil prices. Indian firms have been told to acquire such assets to improve energy security.

Written by Shubhajit Roy | Ramallah | Updated: February 10, 2018 1:34:39 pm
Strategic edge in West Asia: PM to ink key oil pact today PM Modi thanked His Majesty King Abdullah II of Jordan for facilitating the transit. (Source: Twitter/Narendramodi)

Prime Minister Narendra Modi will meet Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, at the Presidential palace on Saturday evening, in what will be their fourth meeting in the last three years. During the visit, they will be meeting in Abu Dhabi on Saturday, and then head to Dubai for the World Government summit on Sunday — where the Indian Prime Minister will deliver the keynote address.

During Modi’s UAE second visit, the two sides are likely to sign a key agreement on Saturday, which will give Indian companies a head start over other global competitors in securing equity in an offshore oil concession in the West Asian nation.

After the bilateral meeting, the Indian community members — who are in-charge of building a temple there — will be presenting documents related to the plans and architecture of the temple. Land for the temple was announced during Modi’s first visit in August 2015. The two leaders will then have dinner together at the palace.

Sources said that ahead of the PM visit, Abu Dhabi National Oil Co (Adnoc) approved a 10 per cent equity to ONGC Videsh Ltd in its ADMA-OPCO offshore concession whose license comes up for renewal next month. OVL, along with Bharat Petroleum Corp and Indian Oil Corp, would pay $600 million for the stake in the concession which currently produces around 7,00,000 barrels per day (bpd) of crude oil but is projected to touch a million bpd by 2021.

Officials, associated with the state visit, said the agreement between the state-run companies of both nations would be signed in PM’s presence when he arrives in the national capital Abu Dhabi on Saturday. Chinese, Koreans and Japanese firms are also vying for an equity in the renewed licence.

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PM Modi, who wants to cut India’s oil imports by 10 per cent by 2022, is steering efforts to buy foreign energy assets, taking advantage of low oil prices. Indian firms have been told to acquire such assets to improve energy security as the country imports about 80 per cent of its crude oil needs.

Adnoc has 60 per cent stake in the existing concession which it will retain. At present, BP holds 14.67 per cent, French Total 13.33 per cent and Japan Oil Development Co 12 per cent. Adnoc signed a deal last year to store about 6 million barrels of oil at India’s Mangalore storage site, taking up about half of its capacity.

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