India has offered UAE stakes in petrochemical plants and refinery projects as it seeks to boost energy ties with the cash-rich Gulf nation.
Oil Minister Dharmendra Pradhan on a two-day visit to UAE, promised “fair, transparent and attractive” policy regime for investing in oil and gas sector in India through “appropriate policy, regulatory and fiscal interventions”.
Addressing industry captains in Dubai, he showcased investment opportunities for UAE, which had in August last year committed to investing $75 billion (nearly Rs 4.99 lakh crore) in India.
On offer was 26% stake for $700 million (nearly Rs 4,656.93 crore) in state-owned Oil and Natural Gas Corporation’s (ONGC) about-to-be-commissioned petrochemical project at Dahej in Gujarat.
Besides, there was 24% equity available for $200 million (nearly Rs 1,330.55 crore) in expansion being planned by Bharat Petroleum Corporation Ltd (BPCL) of its subsidiary Bina refinery in Madhya Pradesh, from 6 million tonnes to 7.5 million tonnes.
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Also, an investment of $530-850 million (nearly Rs 3,525.96-Rs 5,654.84 crore) can get the UAE 25-40% stake in HPCL’s planned petrochemical plant on the Andhra coast, he said, adding that the Gulf nation can also invest in the planned 60 million tonnes in Maharashtra and the Jagdishpur-Haldia and Paradip-Surat gas pipelines.
“UAE makes up for 8% of our oil imports. We are trying to import more oil from UAE. In 2016-17, we plan to import 2.5 million tonnes more oil than 2015-16’s purchase of 16.11 million tonnes,” he said.
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India imports 16MMT crude from UAE(6th biggest source) besides selling & buying substantial petroleum products to UAE
An official statement said the Minister in his meeting with business leaders called for greater economic and strategic ties between India and UAE.
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“India-UAE trade has increased phenomenally in the last half a century. The trade, valued at $180 million (nearly Rs 1,197.5 crore) per annum in the 1970s, is today around $60 billion (nearly Rs 3.99 lakh crore) making UAE, India’s third largest trading partner since 2014-15,” the statement quoted him as saying.
There is an estimated $8 billion (nearly Rs 53,222 crore) UAE investment in India of which around $3.13 billion (nearly Rs 20,823.12 crore) is in the form of foreign direct investment while the remaining is portfolio investment and UAE is the eleventh biggest investor in India in terms of foreign direct investment (FDI).
Pradhan said India genuinely believes that there is potential to transform the buyer-seller relationship with UAE in energy into a genuine energy partnership.
India has allowed 100% FDI in oil and gas exploration and production, refining, pipelines and fuel marketing.
Also, the government last month announced Hydrocarbon Exploration Licensing Policy (HELP) to streamline the award of hydrocarbon acreages under a new fiscal and contractual regime.
Highlighting the major points in HELP, he said companies can now explore and produce conventional oil and gas as well as unconventional hydrocarbon such as CBM and shale under a single license.
The policy, Pradhan said, has many fiscal incentives such as pricing and marketing freedom of crude oil and natural gas, reduced royalty rates for offshore areas.
Also, it envisages a significant reduction in administrative discretion through greater freedom to the operator and increased transparency.
“We are keen to make India’s oil and gas sector fair, transparent and attractive to domestic and foreign investors through appropriate policy, regulatory and fiscal interventions,” he said.
Pradhan began his two-day visit to UAE on Monday with the inauguration of Make-in-India Pavilion at the Annual Investment Meet held at the Dubai World Trade Centre.
Inaugurated Make in India pavilion at Annual Investment Meet of Dubai with Deputy Minister of Economy of UAE pic.twitter.com/bBTAR80EnN
The Pavilion drew participation from about 25 top Indian companies. He later visited the Jabel Ali Free Zone and met Indian investors there.