India to step up oil, gas imports from Africa

December 9th, 2011 - 10:26 pm ICT by IANS  

Pranab Mukherjee New Delhi, Dec 9 (IANS) With its energy needs growing to fuel a $1.8 trillion economy and Africa emerging as an alternative hydrocarbons hub, India Friday said it will step up its oil and gas imports from the resource-rich continent to reduce dependence on any particular region by forming joint ventures.

“We have been trying to diversify our sources of oil and gas imports so as to reduce our dependence on any particular region of the world,” Finance Minister Pranab Mukherjee said at the third India-Africa Hydrocarbons Conference here.

“To meet the growing demand for crude oil and gas in India, Africa will play a major role in the coming years,” he said while inaugurating the two-day conference.

Currently, the Middle East accounts for around 70 percent of India’s oil and gas imports. Saudi Arabia is the largest supplier of oil to India, followed by Iran. Africa now accounts for over one-fifth of India’s oil imports, with Nigeria emerging as the largest source of oil after Saudi Arabia.

Mukherjee added that the import of crude oil from Africa has increased from about 22 million tonnes per annum during 2004-05 to more than 35 million tonnes in 2010-11.

“Today, more than one-fifth of India’s crude oil imports are from Africa, with the major suppliers being Nigeria, Angola, Algeria, Egypt, Cameroon, Equatorial Guinea and Sudan,” he said.

He said India’s refining capacity is set to increase to 238 million tonnes per annum by 2013 from around 194 million now. “This means that we need about 40 million tonnes of additional crude per annum.”

“Similarly, our government’s emphasis on increasing the share of natural gas in the country’s energy basket from the present 10 percent to about 20 percent makes it necessary to look for increasing our LNG imports,” he said.

African countries have proven oil reserves of 132 billion barrels, while annual oil production in the region is 478 million tonnes per annum, which is about 12 percent of the world’s total oil production.

Mukherjee said Indian companies were interested in buying equity stakes in oil and gas assets in Africa and other parts of the world in a bid to enhance India’s energy security.

“It is my firm belief that India and Africa are poised for a long-term partnership in the hydrocarbon sector based on mutuality of interests. In the days to come, we will witness growing investments by Indian companies in Africa and vice versa,” the finance minister said.

Petroleum Minister S. Jaipal Reddy said Indian companies were keen to enter partnerships and form joint ventures for enhancing oil and gas exploration activities in African countries. “Our preferred approach would be to go in for joint ventures with Africa’s national oil companies. There is no limit, We are interested to buy as much oil and gas from Africa as we can.”

The minister said Indian firms like GAIL (India) Ltd and Indian Oil Corporation were interested in sourcing oil and LNG on long-term basis from Africa.

He said Indian companies were also interested in exploring “possibilities of equity participation in existing or proposed LNG liquefication projects; business opportunities in gas processing and gas based petrochemical projects in Africa; and farm-in opportunities in producing gas blocks for conversion to LNG and dispatch to India”.

Reddy also said that India’s premier public sector oil companies - ONGC, IOCL and GAIL - will be offering training to 450 technical personnel from Africa’s oil and gas sector over the next three years.

India’s oil companies are present in around 24 countries, including Egypt, Kenya, Uganda, Tanzania and Mauritius.

With Africa emerging as an alternative to the volatile Middle East, the world’s leading powers as well as emerging powers like China, India and Brazil have intensified their energy diplomacy in the continent. China sources over 30 percent of its oil imports from Africa, with Angola contributing the bulk of it.

As China has entrenched its presence in leading oil-producing African countries, India, too has raised its stakes by building on historical goodwill it has enjoyed in the continent to secure energy assets in the continent through targeted investments, infrastructure deals and lines of credit.

Against this backdrop, the India-Africa Hydrocarbon Conference was conceptualized two years ago as a platform for oil ministers, policy makers, administrators and industry leaders of the two sides to explore fresh investments and forge collaborative ventures in the hydrocarbon sector.

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