A draft agreement to this effect was agreed between Omani commerce minister Maqbool Ali Sultan and petroleum minister Vazhapady Ramamurthy. Indian and Omani officials also agreed that all crude oil and related tieups for the project will be completed within one month. Prime minister Atal Behari Vajpayee and Omani ruler Sultan Qaboos bin Said have instructed the two ministers to clear all hurdles related to the project. There is also a likelihood that the project may be expanded to 9 million tonnes at a later stage.

Vajpayee on Saturday affirmed India's total commitment to two projects -- the $1.1-billion urea venture at Sur, some 300 km away from Muscat, and the $1.2-billion Bina refinery with Bharat Petroleum in Madhya Pradesh.

At a meeting with Sultan Qaboos bin Said at Salalah, the prime minister said: "I would like to assure your majesty of our deep interest in the success of these projects." In this context, he mentioned that fertiliser minister SS Barnala and petroleum minister Vazhapady Ramamurthy, who were part of Vajpayee's delegation, would personally try to move the two projects forward. Official sources said they hoped the fertiliser project would be able to achieve financial closure this year. He also hoped that the Bina project, the Bharat Oman Refinery Project, would be close to finalisation. Both projects, they said, were in the final stages of discussion.

Sultan Qaboos, who showed considerable understanding on the Indian position on nuclear disarmament and the rise of extremism in the region, was very keen to expand the areas of Indo-Omani cooperation. "We are looking for more (such) projects," he told the Indian delegation at meetings on Saturday.

According to officials who attended the meetings, the next stage in the fertiliser project would be to find financiers who will bankroll it. The project involves long-term urea purchases by India from Oman. India-Oman cooperation has been chugging along smoothly even in the private sector, with Enron recently announcing a 20-year deal to buy LNG.

Bhel recently bagged a gas turbine order from the country and SCI is scouting around for a joint venture shipping country.

Oman, a country of 2.2 million people, has a huge expatriate population of over 500,000 (five lakh) - about two-thirds of them being Indian. Compared to the other Gulf countries, Oman is a moderate Islamic nation. The present Sultan has strong links to India: his grandfather stayed 30 years in India and was interred there; and his father studied at Mayo college in Ajmer, Rajasthan.