India for oil meet twice a year; Saudis mull refinery project

In a move to institutionalise oil diplomacy in the Asian region, India today proposed holding a conference of major oil producers and importers twice a year. The proposal will be discussed at the first Asian regional cooperation round table tomorrow.

India has suggested that the meeting be alternatively hosted by countries importing and exporting oil every year.

Third biggest crude buyer Japan has already agreed to the suggestion. Japanese Minister for Economic Trade and Industry Shoichi Nakagawa told this to reporters after meeting Petroleum Minister Mani Shankar Aiyar.

There would be minister-level participation in this conference from Saudi Arabia, Iran, Kuwait, Malaysia, Oman, the United Arab Emirates, Qatar and Japan. There would be delegations from China, South Korea and Indonesia as well.

Aiyar held bilateral meetings with the visiting ministers of these countries today. Saudi Arabia, the world's largest producer of oil, invited Indian companies to set up an oil refinery there, mainly for export of petroleum products to third countries. It has cleared Oil and Natural Gas Corporation's bidding for gas field development projects.

Officials from Saudi national oil company Saudi Aramco's will visit New Delhi later this month for talks with ONGC and Indian Oil Corporation to finalise a joint venture for building a refinery there.

Saudi Arabia is also keen on entering the downstream oil refining and retailing market in India and will also explore setting up a refinery-cum-petrochemical plant.

"We discussed opportunities for investment in the two countries. We may invest in India and would welcome investment by Indian companies (in Saudi Arabia)," Saudi Oil Minister Ali al Niami said after a meeting Aiyar.

The Japanese minister said India and Japan discussed joint oil stock management and exchange of technology but expressed Tokyo's reservation on the two countries jointly bidding for oil and gas properties in third countries.

Officials said India and Japan would be forming a joint working group which among other things would work on exploitation of gas hydrates.

West Asian producer Qatar extended support to India's demand for long term crude oil supply contract from the Gulf countries, saying it will impart greater stability in the market.

"Long term contract will stabilise the volatile markets," Qatar energy minister Abdullah bin Hamad al Attiyah told reporters here. Qatar is looking at exporting additional LNG to India. It is already in contract with Petronet LNG Ltd for supplying 7.5 million tonnes gas.

However, Saudi Oil Minister Ali al-Naimi said Saudi Arabia was willing to pursue longer-term oil supply contracts with Asian consumers as long as the terms were right.

"We recognise the need for a long-term contract. The consumer also recognises that the seller wants a long-term commitment to the product. That is not so easy to agree," Naimi told a news briefing after meeting with his Indian counterpart.

Oil deals

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• The third biggest crude buyer Japan agrees with India there should be regular meetings of oil trading countries
• Saudi Arabia clears ONGC's bid for gas field development projects
• Qatar extends support to India's demand for long-term contracts from the Gulf