Government Offers Stakes to UAE in Petro Projects
Dubai: The government has offered the United Arab Emirates (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 the UAE, promised a "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 the UAE, which had in August last year committed to invest $75 billion in India.
On offer was a 26 per cent stake for $700 million in state-owned Oil and Natural Gas Corp's (ONGC) about-to-be-commissioned petrochemical project at Dahej in Gujarat.
Besides, there was 24 per cent equity available for $200 million in expansion being planned by Bharat Petroleum Corp Ltd (BPCL) of its subsidiary Bina refinery in Madhya Pradesh, from 6 million tonne to 7.5 million tonne.
Also, an investment of $530-850 million can get the UAE a 25-40 per cent 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 tonne in Maharashtra and the Jagdishpur-Haldia and Paradip-Surat gas pipelines.
"UAE makes up for 8 per cent of our oil imports. We are trying to import more oil from UAE. In 2016-17, we plan to import 2.5 million tons more oil than 2015-16's purchase of 16.11 million tons," he said.
An official statement said the minister in his meeting with business leaders called for greater economic and strategic ties between India and the UAE.
"India-UAE trade has increased phenomenally in the last half a century. The trade, valued at $180 million per annum in the 1970s, is today around $60 billion making UAE, India's third largest trading partner since 2014-15," the statement quoted him as saying.
There is an estimated $8 billion UAE investment in India of which around $3.13 billion is in the form of foreign direct investment, while the remaining is portfolio investment and the UAE is the eleventh biggest investor in India in terms of FDI.
Mr Pradhan said India genuinely believes that there is potential to transform the buyer-seller relationship with the UAE in energy into a genuine energy partnership.
India has allowed 100 per cent 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, Mr 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 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 for domestic and foreign investors through appropriate policy, regulatory and fiscal interventions," he said.
Mr Pradhan began his two-day UAE visit on Monday with the inauguration of the Make-in-India Pavilion at the Annual Investment Meet held at the Dubai World Trade Centre.
The Pavilion drew participation from about 25 top Indian companies. He later visited the Jabel Ali Free Zone and met Indian investors there.
