India keen on getting more Iraq oil

India keen on getting more Iraq oil

India keen on getting more Iraq oil

India is keen to boost its energy ties with Iraq when External Affairs Minister Salman Khurshid is set to tour the West Asian country from Wednesday, the first such high-profile visit from New Delhi to Baghdad in more than two decades after the 1990-91 Gulf War.

With India’s crude oil import from Iran declining in the wake of the sanctions by the United States and the European Union, New Delhi is keen on additional supply from Iraq. Khurshid is expected discuss the issue during a meeting with his Iraqi counterpart Hoshyar Zebari in Baghdad.

Khurshid will be the first External Affairs Minister of India to visit Iraq after New Delhi revived its diplomatic engagement with the country in 2011. I K Gujaral, who was External Affairs Minister in V P Singh’s Government, had last visited Baghdad in 1990  to oversee evacuation of Indian citizens from Iraq in the wake of the Gulf War.

The Ministry of External Affairs on Sunday said that Khurshid would also call on Iraq’s Prime Minister Nouri al-Maliki, Speaker of Council of Representatives Usama al-Nujayfi and Deputy Prime Minister for Energy Hussain al-Shahristani.

Iraq, which has the world’s third largest proven oil reserves, has of late emerged as the second largest crude oil supplier to India. New Delhi imported 24 million tonnes of crude oil from Iraq in 2012-13. India was the destination of an estimated 19 per cent of total crude oil exports from Iraq in 2012. Approximately, 13 per cent of India’s total crude import came from Iraq during the same year. 
While Saudi Arabia continued to be the largest supplier of crude oil to India by exporting 36.62 million tonnes in the last financial year, the US and EU sanctions on Iran and consequent problems over payment and insurance of the tankers resulted in a 26.5 per cent decline in import of crude from the Islamic Republic. Iran slipped from the second largest oil supplier to India in 2010-11 to the third in 2011-12 and to the seventh in 2012-13.

New Delhi is understood to have requested Iraq for an additional crude supply of 80,000 barrels per day.

 Baghdad is considering raising oil export to India by at least 30 per cent and New Delhi expects a firm assurance from the Iraqi government during the external affairs minister’s visit.

Iraq has aimed at boosting its crude oil production capacity from existing 2.5 million barrels per day to 12 million barrels per day by 2017.

New Delhi had in 2004 scaled down its diplomatic contact with Baghdad and withdrawn B B Tyagi, India’s then ambassador to Iraq. The decision to withdraw the envoy had come just a few months after a militant organisation abducted three Indian truck drivers in Iraq. Though intense negotiation with the kidnappers had resulted in their release after 44 days, New Delhi had issued an advisory against emigration of Indians to Iraq and it had remained effective till 2010.

India, however, in 2011 appointed Suresh Reddy new Ambassador to Iraq in order to reconstruct the traditional ties that had flourished during Saddam Hussain’s reign in Baghdad. 

During his two-day visit to Baghdad, Khurshid is also expected to reaffirm India’s commitment to “support the ongoing post-war reconstruction and development efforts in Iraq.”