Exclusive: UAE-India energy ties will get stronger, says Indian minister

Dubai - The expansion of refinery and petrochemicals capacities in India offers enormous investment opportunities for companies in the UAE, says minister.

In an exclusive interview with Khaleej Times, Indian Minister for Petroleum, Natural Gas and Steel Dharmendra Pradhan says the potential for partnerships in the country's energy's sector is huge. He welcomes more UAE investments while lauding the role played by Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and CEO of Adnoc in strengthening energy ties between the two countries.

How do you assess the UAE-India partnership in the energy sector? What are the possible areas of future expansion with the Abu Dhabi National Oil Company (Adnoc)?

India and UAE have strategic ties with energy being a key pillar during the last six years. India sees UAE as a close trading and investment partner in oil and gas as well as in renewables.

UAE has been one of the biggest partners in the hydrocarbon with a trade value of $ 19.9 billion last year. Let me illustrate — the UAE has become India’s third largest source for crude oil, accounting for 10 per cent of total crude oil imports; the second largest source of LNG with 12.4 per cent of total LNG imports; third largest source of LPG with 22 per cent of total LPG imports, and second largest source for Petroleum Products.

Indian companies are also active in oil and gas exploration and production activities in two blocks in Lower Zakum and Onshore Block 1 in the UAE, with investments over $706 million.

My deep appreciation to the UAE leadership and to Sultan Al Jaber, Minister of Industry and Advanced Technology, and CEO of Adnoc. Adnoc has already stored 5.86 million barrels of Adnoc crude in Mangalore Strategic Petroleum Reserve. We have also agreed to improve the terms of storage by Adnoc.

Further, we deeply appreciate the immediate support extended by the Adnoc CEO in supplying additional and timely supply of LPG and crude oil to India in April and May during the peak of Covid-19 pandemic. These LPG supplies helped us supply cylinders to over 8 crore Indians.

PM Narendra Modi recently pitched for ‘responsible fuel pricing’ stating that for far too long the global fuel prices have been on a ‘roller coaster’...

The price should be profitable for producers as well as affordable for consumers. While we are not in favour of very low prices, we also do not support high prices. Market fundamentals now do not support such high prices.

Crude price volatility is another major challenge that needs to be addressed as Indian consumers are highly price sensitive. We also need to move to a transparent and flexible market for both oil and gas.

We believe that the major producers from Opec should abolish the Asian Premium on crude oil. This becomes even more urgent as the pandemic once again confirmed that Asia continues to be the main demand centre for crude oil.

Recently, in a virtual seminar with PM Modi, Adnoc chief Sultan Al Jaber said his company seeks Indian partners for its $45 billion petrochemical expansion plans. Any details?

Our refining capacities are expected to grow from about 250 MMTPA now to 450 MMTPA to meet our domestic demand and also for export of petroleum products. The expansion of refinery and petrochemicals capacities in India offers enormous investment opportunities for companies in the UAE, including Adnoc.

Does India’s ties with Iran make it tricky for India to deal with the rest of the Middle East?