Indian firms set sights on more Abu Dhabi oil concessions
Close cooperation with UAE has led in stronger energy ties, envoy says
Indian companies will bid for additional concessions to develop Abu Dhabi’s oilfields as energy ties with the UAE strengthen due to close cooperation, India’s ambassador to the UAE said yesterday.
“For years, India [and the] UAE had [a] buyer-seller relationship in the energy sector but in the last few years the relationship transformed. We got our first significant concession in [the] Lower Zakum basin, that assures India of 1.5 million tonnes of oil per year for the next 40 years,” said Navdeep Singh Suri at the India-UAE strategic enclave in Abu Dhabi.
“We are also bidding for additional concessions and from the embassy side, we are following up that process very closely,” he added, without elaborating further.
Offshore concession deal
Earlier this year, Abu Dhabi and an Indian consortium led by the Oil and Natural Gas Corporation (ONGC) signed a 10 per cent offshore concession agreement giving Indian companies an opportunity to develop Abu Dhabi’s lucrative offshore oilfields, which produce about 1.4 million barrels of oil per day.
The consortium, led by India’s ONGC Videsh, contributed a participation fee of Dh2.2 billion ($600 million) to enter the Lower Zakum concession, which will be operated by Adnoc Offshore, a subsidiary of the Abu Dhabi National Oil Company (Adnoc) on behalf of all concession partners.
Ambassador Suri also said both countries were cooperating closely in the oil storage sector, with Adnoc playing an important role.
“In Mangalore we completed our first strategic petroleum reserve in partnership with the Abu Dhabi National Oil Company with a capacity of six million barrels of oil. Discussions are underway for the second oil storage facility at Padur with a capacity of nine million barrels of oil.”
Adnoc is also investing in India’s $44 billion Ratnagiri petrochemical complex in cooperation with Saudi Aramco. The two firms took a 50 per cent stake in the project recently, investing $22 billion.
Speaking about the investment climate in India, he said the Modi administration is pushing to remove hurdles to doing business and also encouraging foreign direct investment to boost its economy.
“The Abu Dhabi Investment Authority (Adia) is the principal driver of investments in the real estate, infrastructure and renewable energy, among others,” he said. “The investment atmosphere is conducive for investors to come to India.”
He also said India decided to set up a special fast-track mechanism for UAE investors headed by the secretary of the Department of Industry and by the UAE ambassador in New Delhi.
“They already had their first meeting and their intent is to resolve any issues faced by the UAE investors. This is not just to solve problems but also to encourage further UAE investments.”
Trade between the two countries stood at $52 billion in 2017, with non-oil trade accounting for $34 billion. India’s FDI into the UAE last year was $6.6 billion while the UAE’s investment in India stood at $5.8 billion.