S Arabia for long-term oil deals

Saudi Arabia today expressed willingness to extend long term crude oil supply contracts to India but wanted Asia's third largest oil consuming nation to enter into strict take-or-pay contracts.

"We have agreements with a number of countries for supplying crude oil for 30 years. We are open to long term contracts (with India) but every contract has a price. If the consumer is willing for take-or-pay, I don't think there is any problem," Saudi Arabian oil minister Ali Al Niami told after a meeting with petroleum minister Mani shankar Aiyar today.

Saudi Arabia is India's single largest supplier of crude oil, accounting for 23.55 million tonnes out of total imports of 90.43 million tonnes in 2003-04.

Goverment wants its principal suppliers to enter into a long-term supply deals instead of current one-year contracts to tide over supply concerns.

Niami, who is here to attend a day-long roundtable of major Gulf Oil producers and main Asian consumers, said he discussed with Aiyar demand, supply, security of supplies and stablity of market.

"The biggest concern any consuming country has is security of supplies, stable market and fair prices... We, as the world's largest producer, have committed to security of supplies," he said.

India spent some $19 billion last year on oil imports as domestic production at 33 million tonnes was enough to meet just 30% of the demand.

Tripathi said the Aaudi Arabian offer was interesting and details would be discussed with Aaudi Aramco officials.

Saudi Arabia has also pre-qualified ongc for developing its gas fields.

"ONGC has been invited to bid for development of a cluster of gas fields in Saudi Arabia," a senior official said adding the Saudi Arabian side did not indicate the dates when they would be inviting bids for the project.

Saudi Arabia, the world's largest oil producer, sold 23.55 million tones of crude oil to India in 2003-04 and was keen to share the $15 billion oil market.

Saudi Aramco was one of the bidders for acquiring government's stake in Hindustan Petroleum Corp Ltd (HPCL) but the privatisation of the country's third largest refining and marketing company never happened.