The three companies actually began pow-wows with Iraqi counterparts three years ago and long before bilateral dialogues were resumed through the India-Iraq Joint Commission last week. The Joint Commission met in Delhi this week after a lull of 10 years, the last meeting having been in Baghdad in 1988.

Indianoil, ONGC-Videsh and Engineers India Limited have been holding ``purposeful talks'' with Iraqi organisations like SCOP, SOIDC, PETCOM and SOMO since 1995. At the meeting of the sub-committee on petroleum, the three companies offered technical assistance and training, apart from rehabilitating and revamping downstream facilities, like oil refineries, petrochemical projects and oil pipelines.

An Indo-Iraq joint working group will now study the modalities of financing theseprojects. Some ``innovative ideas'' were floated at the meeting of the Joint Commission, like allowing Indian companies to fund the projects from their internal resources till the Iraqis were ready to pay.

Another suggestion was to allow Indian companies to raise money from the international capital market for the projects till the UN sanctions were lifted and Iraq was able to generate enough surpluses to pay back its dues. The Iraqis already owe Indian construction companies $ 800 million for rehabilitation projects undertaken in war-depleted Iraq since the eighties, some of which was covered by the deferred payment arrangement (DPA) granted by the Centre.

At the three-day meet, the Iraqis reiterated their commitment to pay back their dues to these companies, once the UN sanctions were lifted. India reciprocated with a fresh line of credit, with which the Iraqis could purchase consumer durables, manufactured items and pharmaceuticals from here.

The mode of funding the upstream and downstream oilindustry projects were not discussed and will now have to be thrashed out by the joint working group of oil industry experts. Predictably, the Indian representatives on the joint working group are Indianoil, ONGC-Videsh and EIL.

The group will also work out the areas of Indo-Iraq cooperation in the hydrocarbon sector, including oil exploration and production and revamping downstream facilities. Sub groups will be set up to work out the nitty gritties of projects that will follow.

Broadly, the Iraqis want the support of Indian companies in fabricating equipment and manufacturing components and systems for downstream oil facilities. They have also provided a sample list of oil industry materials and equipment that can be supplied from India.

Union petroleum minister Vazhapadhy K Ramamurthy, who co-chaired the Joint Commission with Iraqi oil minister Amir Mohammad Rashid, offered the services of oil experts on a wide spectrum of downstream activities. Indian participation has been offered for instance, inrefurbishing and commissioning hydrocracker units, rehabilitating damaged lube oil plants and waste water treatment plants in refineries.

Indian companies are keen to rebuild product depots and upgrade downstream marketing infrastructure. Expertise has also been offered to Iraq for modernising bottling plants and distribution network for liquefied petroleum gas (LPG).

Another joint study group, comprising the Oil and Natural Gas Corporation (ONGC), its subsidiary, ONGC-Videsh and Iraqi oil ministry experts, will identify potential investments by India in developing and upgrading oilfields and rehabilitating production facilities. Incidentally, ONGC-Videsh is a bidder for both a discovered property and an exploration block in Iraq.

Commercial ties between India and Iraq are of longstanding. Oil-rich Iraq is a source of sweet crude for Indian refineries and the country plans to import 1.5 million tonne of the Bashra light crude through the UN-monitored ``food for oil'' programme this year.

Iraq has beena large market for Indian construction companies, but for some time at least, investments there will hinge on the ability of an Indian company to withstand deferred income. The national oil companies planning offices in Baghdad will have a lot of details to work out.