India has invited investments from the United Arab Emirates in a slew of oil projects as part of Prime Minister Narendra Modi’s drive to attract greater foreign participation in upgrading and expanding the nation’s stretched infrastructure.
India is eager for foreign capital and technology to develop its economy while the UAE, among the richest of the Gulf Arab energy exporters, wants to use overseas investment to diversify its asset base.
During Modi’s trip to the UAE last year, the two states agreed to set up a $75bn fund to invest in India’s infrastructure projects and other fields
“India is looking at UAE as a preferred partner for some of the projects. They have realised the potential of the Indian market,” Indian Oil Minister Dharmendra Pradhan told reporters after a meeting with UAE Energy Minister Suhail Mohamed Al Mazrouei.
Pradhan said that the UAE is keen to use half of the 1.5mn tonne oil storage facility India has built at Mangalore in the southern state of Karnataka.
India has offered the UAE one chamber at the Mangalore site to store oil. Of that oil, the UAE would be allowed to use only a third for exports while the remainder would be utilised by India as strategic reserves.
Pradhan told the visiting minister that Indian companies are interested in acquiring a stake in the Abu Dhabi Company for Onshore Oil Operations (ADCO), which is developing the UAE’s biggest oilfields.
In a presentation to the visiting minister India also showcased opportunities in India’s refining, petrochemical and pipeline sectors.
These included an Oil and Natural Gas Corp petrochemical plant in western India and a Hindustan Petroleum Corp facility in southern India, with a 25% to 40% stake available for an estimated $530mn to $850mn.
Pradhan offered a 24% stake for $200mn in the Bina refinery aiming to increase its capacity by a quarter from 120,000 barrels per day (bpd).
India, the world’s fourth-biggest oil consumer, has also sought more oil from the UAE on favourable terms.
In the financial year starting in April, Indian state refiners want to boost term purchases from the UAE by about 50,000 bpd from the current 204,000 bpd, Pradhan added.
