In an exclusive interview with Khaleej Times, Indian Minister for Petroleum, Natural Gas and Steel Dharmendra Pradhan says the potential for partnerships in the country's energy's sector is huge. He welcomes more UAE investments while lauding the role played by Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and CEO of Adnoc in strengthening energy ties between the two countries.
How do you assess the UAE-India partnership in the energy sector? What are the possible areas of future expansion with the Abu Dhabi National Oil Company (Adnoc)?
UAE has been one of the biggest partners in the hydrocarbon with a trade value of $ 19.9 billion last year. Let me illustrate — the UAE has become India’s third largest source for crude oil, accounting for 10 per cent of total crude oil imports; the second largest source of LNG with 12.4 per cent of total LNG imports; third largest source of LPG with 22 per cent of total LPG imports, and second largest source for Petroleum Products.
Indian companies are also active in oil and gas exploration and production activities in two blocks in Lower Zakum and Onshore Block 1 in the UAE, with investments over $706 million.
My deep appreciation to the UAE leadership and to Sultan Al Jaber, Minister of Industry and Advanced Technology, and CEO of Adnoc. Adnoc has already stored 5.86 million barrels of Adnoc crude in Mangalore Strategic Petroleum Reserve. We have also agreed to improve the terms of storage by Adnoc.
Further, we deeply appreciate the immediate support extended by the Adnoc CEO in supplying additional and timely supply of LPG and crude oil to India in April and May during the peak of Covid-19 pandemic. These LPG supplies helped us supply cylinders to over 8 crore Indians.
PM Narendra Modi recently pitched for ‘responsible fuel pricing’ stating that for far too long the global fuel prices have been on a ‘roller coaster’...
The price should be profitable for producers as well as affordable for consumers. While we are not in favour of very low prices, we also do not support high prices. Market fundamentals now do not support such high prices.
Crude price volatility is another major challenge that needs to be addressed as Indian consumers are highly price sensitive. We also need to move to a transparent and flexible market for both oil and gas.
We believe that the major producers from Opec should abolish the Asian Premium on crude oil. This becomes even more urgent as the pandemic once again confirmed that Asia continues to be the main demand centre for crude oil.
Recently, in a virtual seminar with PM Modi, Adnoc chief Sultan Al Jaber said his company seeks Indian partners for its $45 billion petrochemical expansion plans. Any details?
Our refining capacities are expected to grow from about 250 MMTPA now to 450 MMTPA to meet our domestic demand and also for export of petroleum products. The expansion of refinery and petrochemicals capacities in India offers enormous investment opportunities for companies in the UAE, including Adnoc.
Does India’s ties with Iran make it tricky for India to deal with the rest of the Middle East?
Iran has been an important source of crude oil for Indian refineries. We will continue to follow the developments in the Middle East. I am confident that the Indian refineries would take appropriate decisions keeping their commercial interests in mind as they source crude oil from various countries in the Middle East.
There has been a criticism that India lacks a coherent energy security policy when it comes to the Middle East. Is it a fair criticism?
During the last financial year, the Middle East countries remained our main supplier of hydrocarbons, with 60 per cent of crude import. In fact, the supplies of crude oil, natural gas and LPG has remained fairly stable over the years from the Middle East.
India has invested in the oil and gas sector in the Middle East. particularly in UAE and Oman, and is also exploring other opportunities to increase its footprint in the region. Saudi Arabia and UAE have also announced significant investment decisions in India’s energy sector.
With the Indian economy not growing as expected, how does India expect to attract international investment from countries like the UAE?
While we have seen a significant drop in GDP growth rate during the last quarter, we are already seeing the green shoots of recovery in our economy.
Given its huge energy appetite, there is a huge potential for investments in India’s oil and gas sector, be it in the expansion of City Gas Distribution networks, Natural Gas Pipeline, LNG terminals, over 5,000 compressed Biogas (CBG) plants and others.
I am confident that UAE companies will partner with their Indian counterparts for investments, infusion of technologies and innovation through digitalisation in our fast-growing energy market.
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