Iraq to meet India's demand for crude oil

Iraq on Friday assured to supply additional crude oil to meet growing demands of India, even as the two countries inked a deal to elevate the bilateral energy ties from a buyer-seller relation to a strategic partnership.

Baghdad has also agreed to consider pre-qualifying Indian Oil Corporation Limited for downstream projects coming up around the four-billion barrel oilfield near Nasiriyah in southern Iraq.

India’s ONGC Videsh Limited, Mangalore Refinery and Petrochemicals Limited and Reliance Industries Limited have already been pre-qualified for participation in the Nasiriyah Integrated Project. 

Iraqi Prime Minister Nouri Al Maliki’s maiden visit to India saw Baghdad agreeing to consider New Delhi’s requests for better terms for crude oil supply, including increasing the interest-free credit period from 30 days to 60 days.

Maliki and Prime Minister Manmohan Singh agreed to infuse new dynamism to the traditional ties that flourished during Saddam Hussain’s reign in Baghdad, but was on a decline for many years ever since the Gulf War broke out in early 1990s.

“We have agreed that our energy trading relationship should be turned into a strategic partnership, including through joint ventures in oil exploration, petrochemical complexes and fertilizer plants,” Singh told journalists after a meeting with Maliki.

He noted that Iraq had last year supplied 12 per cent of total crude oil import of India and thus emerged as the second largest crude oil supplier to India after Saudi Arabia. 

He assured Maliki of New Delhi’s commitment to “participate constructively” in reconstruction of Iraq, particularly through involvement of Indian companies in infrastructure project in the war-shattered country.

The two prime ministers agreed to actively explore the possibilities of establishing a urea plant and phosphate fertilizer units as joint ventures in Iraq, utilising natural gas resources of the West Asian country.