The Hindu : India keen to tie-up more imports

Online edition of India's National Newspaper
Wednesday, Jul 16, 2003

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Business

India keen to tie-up more imports

By Our Special Correspondent

NEW DELHI JULY 15. In spite of India's decision not to send troops to Iraq, public sector oil companies are confident that contracts finalised earlier for acquiring oilfields by public sector companies such as ONGC Videsh (OVL) will be honoured. This is especially so in the case of Abu Khema oilfield which had been ratified during the regime of Saddam Hussein by the Iraqi oilfield.

Oil company sources say that the OVL Managing Director, Atul Chandra, is keeping a close watch on the situation in Iraq and had expressed confidence recently that there would be no problem in the case of the contracts already approved. In regard to other oilfields, however, like the Tuba field for which many companies are in the race, the sources say this would depend on the negotiating skill of companies such as OVL. The sources feel that the decision not to send troops to Iraq is not likely to have any adverse repercussions on Indian companies seeking contracts for reconstruction projects in that country.

Apart from OVL, other companies, which are sending teams to Iraq to scout for projects, are the Indian Oil Corporation (IOC) and Engineers India (EIL).

India is also keen, however, to tie-up more oil imports from Iraq because Basra light crude is suitable for refineries in this country. It has also sought more imports of the heavier sour crude from Iraq. The total imports being proposed are over three million tonnes for which talks were held by the Petroleum Secretary, B. K. Chaturvedi, during his recent visit to the U.S. The discussions were held with the U.S. Department of Energy, which is coordinating the issue of Iraqi oil imports. It is not yet known whether there would be any change in this situation with the creation of the new governing council in Iraq though there is no doubt that the U.S. Administrator will remain the final authority in that country.

In the past, India has been importing three million tonnes of crude oil from Iraq but it is now seeking to purchase higher quantities this year.

The U.S. Department of Energy is believed to have informed the Indian delegation that it will take three to four months for oil to begin flowing from Iraqi fields. Even so, supplies would come in handy since imports from Nigeria have dried up owing to political problems in that country. The purchases from Iraq would be on term contracts and on government-to-government basis.

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