India is set to initiate fresh talks with Iraq for expanding cooperation in the energy sector, as it looks to new markets in the region to build the country?s energy security that has been affected by slowdown in oil imports from international sanction-hit Iran.
A joint commission set up by the two countries to look at areas of further expanding cooperation is scheduled to meet in July and take up specific issues pertaining to broadbasing relations in the energy sector with permission for Indian companies to invest in the sector.
Sources told FE that, ?the joint commission is to be headed by petroleum and natural gas minister M Veerappa Moily on India?s side and Iraq?s deputy PM Sharistani will meet next month to discuss energy needs and the cooperation the both can get into.
Iraq has the fifth largest proven reserves of petroleum in the world, after Saudi Arabia, Venezuela, Canada and Iran. But infrastructural problems because of years of sanctions and civil war have meant Iraq is far away from developing its known oil fields. Iraqis estimate investments of $30 billion are needed if their country is to reach optimum production targets. The country is trying to increase its oil production and needs investments to repair its infrastructure, and who better than the Indian public and private sector with decades of experience of having worked in Iraq in the 1970s and 80s to provide necessary technical and manpower assistance.
?Iraq wants Indian investments in oil exploration, refinery and other sectors. It hopes to increase its oil production and exports which would finance its development activities. Many Indian companies have plans to invest in Iraq,? said sources.
Indian refineries geared to process Iranian oil find the Iraqi oil a near-perfect substitute in terms of quality.
Reliance Industries Limited (RIL), along with six other global firms, was recently shortlisted for development of the multi-billion-dollar Nasiriya oilfield project. Jindal SAW has won a $198 million contract to build and operate a factory for manufacturing oil and gas pipeline in Southern Iraq. Several other Indian companies have also invested and more are likely once the internal situation in the country improves.
According to Iraqi officials, there are no obstacles to ramping up economic relations significantly between the two countries.
Energy and revival of economic links topped the agenda of the external affairs minister Salman Khurshid to Iraq on Thursday. The US Energy Information Administration has estimated that India and the US were the topmost destinations for Iraq?s crude oil exports in 2012, with both importing 19% each of Iraq?s oil production. Iraq exported 13% of its crude to China in 2012.
According to MEA, the Indian Oil Corporation (IOC) has been providing training in India to the Iraqi oil officials in various subjects related to downstream oil sector. So far, over 220 officials from the Iraqi ministry of oil have benefited from IOC?s 20 training programmes.
After Saudi Arabia and Iran, Iraq is the third largest t supplier of crude to India. IOC is the largest importer of crude oil from Iraq. HPCL and BPCL are the other two major Indian crude importers from the country.
Iraq is hopeful of boosting its crude oil production capacity from existing 2.5 million bpd to 12 million bpd by 2017.
