Aiyar plea to end premium on crude

Petroleum Minister Mani Shankar Aiyar on Friday made a strong pitch for ending the premium paid by Asian countries on crude oil purchased by them.

He argued that with India's oil-sufficiency levels set to fall from the present 30 per cent, the only way to check the decline was to compromise on economic growth.

In addition, Aiyar held bilateral meetings with over a dozen countries as part of the oil diplomacy initiative on the sidelines of the Opec conference in Vienna.

"The challenge of sustainable development in our forum here is to see how access to fossil fuels is prioritised so that sustainable development is encouraged and environmentally-damaging, wasteful consumption avoided. Tragically, the fact is that the present system of oil pricing encourages uneconomic consumption and discourages sustainable development," the minister said in his address at the Opec meeting, where India is a special invitee.

He proposed a uniform official selling price and significant spot trading of West Asian crude to increase liquidity and establish "a genuine and representative marker crude oil" for the Asian market.

Among the bilaterals Aiyar held, his meeting with Saudi Arabian Oil Minister Ali Al Naimi was the most significant where India demanded being listed as the first non-western country eligible to participate in exploration and production blocks in Gulf country.

Joint ventures in Saudi Arabia's natural gas sector and joint participation in downstream projects in third countries were also discussed.

The minister also ministers from Iran, Angola, Sudan, Norway, Indonesia, Venezuela, Nigeria, Austria, Egypt, Libya, Algeria, Qatar and Syria.

According to an official release, India and Iran have decided on a package of measures.

While the details are being worked out, the conclusions range from Indian participation in three Iranian oil fields and joint exploration of gas fields, long term purchases of LNG, revamping of refineries at Tehran and Tabriz, tankage; engineering and design; joint ventures in petrochemicals; and Iranian investment in the Indian petroleum and petrochemical sector, and vice-versa.

India also pushed the case of OVL acquiring stake in an oil block.