India, Iraq to ink pact for energy cooperation

New Delhi: India plans to strengthen its ties in the energy sector with Iraq, the second largest crude oil supplier to the country.

The Cabinet on Thursday is expected to consider a proposal from the Petroleum and Natural Gas Ministry seeking approval for enhancing cooperation with Iraq in the sector.

Besides, a formal memorandum of understanding on cooperation in the sector would be signed during the four-day visit of the Iraqi Prime Minister Nouri al-Maliki to India starting on Thursday.

Nomination basis
Last month, Petroleum and Natural Gas Minister M. Veerappa Moily, on his return from Baghdad after attending the 17 {+t} {+h} Joint Commission Meeting between India and Iraq, had said that the Gulf nation has offered three discovered blocks in Middle Furat oil fields on nomination basis to Indian companies, particularly national oil companies.

Giving blocks on nomination basis would mean offering India access on a preferential basis, and the Indian companies need not compete with other international players in the bidding rounds to acquire stake.

Iraq has also committed to meet the long-term crude oil requirements of India and is open to consider more favourable commercial terms including extending the interest free credit period from 30 to 60 days.

In 2012-13 (provisional), India’s imports from Iraq stood at 24.04 million tonnes, of the total crude oil imports of 186.3 million tonnes.

Opportunities in gas
Moily had said that possibilities for cooperation in the gas sector could include LNG imports from the gulf nation an issue which was also discussed at the Joint Commission Meeting. Indian companies were also keen to participate in the Nassiriya integrated project in Iraq.

It has also agreed to restart negotiation with ONGC Videsh Ltd on the long pending contract for oil Block 8 in Iraq. ONGC Videsh has invested about $2 million till March 31, 2012.

It is a discovered block estimated to hold 645 million barrels of in-place reserves, of which 54 million are recoverable.

The gulf nation has also shown interest in Indian Oil Corporation’s 15-million-tonne Paradip refinery project in Odisha.