Petroleum Minister Dharmendra Pradhan is likely to hold consultations with the Saudi Arabian Government on the possibilities of forging deeper partnership in the hydrocarbons sector including investments and joint ventures, during his two-day visit to the Arab kingdom which starts October 28.
Sources privy to the development said that Pradhan’s visit is part of the India-Saudi Arabia joint energy consultations which are held on a six-monthly basis between the two nations. This time however, it holds significance due to the fact that amid falling global oil prices, the Arab kingdom, which traditionally has been the largest supplier of crude to India as well as other nations, is feeling threatened by South American nations, which are fast emerging as viable suppliers of the valuable commodity.
During the visit of Saudi Arabian Deputy Prime Minister and Crown Prince Salman Bin Abdulaziz Al-Saud to India in February this year, the Gulf nation had reiterated its commitment to implement all issues mentioned in the Delhi (2006) and Riyadh (2010) declarations, especially on moving to a deeper partnership in the hydrocarbons arena including investments and joint ventures, bilaterally and in third countries as well.
It was agreed at that time that both the nations will hold further discussions on this aspect during the next meeting of the annual India-Saudi Arabia energy cosultations.
Now with Pradhan scheduled to be in Saudi Arabia between October 28 and 29, official sources said that there is a strong possibility of these issues being discussed between the two nations.
ONGC Videsh ltd (OVl), the overseas of the country’s biggest explorer ONGC, incidentally does not have any stake in any of the oilfields in Saudi Arabia. In the Gulf region, OVl is the sole licencee of a block in Iraq. Apart from this, it has stakes in two blocks in Syria.
Saudi Arabia, sources said, would be keen to ensure that it forges some kind of long term partnerships in the sector with India, and this is likely to be a key point of discussions between the two sides.
According to energy sector watchers, the fact that Saudi Arabia is world’s largest oil exporter and India is the world’s fourth largest oil consumer after US, China and Japan, it wants to engage India as a major market for its energy products.
To further this point, Saudi Arabia’s two major oil companies Aramco and Sabic are also looking at major investment opportunities in India, sources said. India imports between 60 per cent and 70 per cent of its oil from the Middle East and Saudi Arabia currently is India’s largest oil supplier, at about 19 percent of oil imports (about 735,000 barrels per day).
Analysts said that while crude oil imports from Saudi Arabia are expected to double over the next 10 to 15 years, India is likely to become the second largest consumer of the commodity during the same period. However India at the same time, has also heightened its interest towards seeking shipments from nations like Venezuela and even Russia is aggressively marketing is oil and gas to New Delhi. This is something of which Saudi Arabia is well aware of and therefore is keen to maintain its relevance with New Delhi, sources pointed out.
Keeping in mind this context, Pradhan’s visit to Riyadh is likely see some major takeways for New Delhi.