Iraq has in-principle agreed to supply more oil to India, export sulphur and LNG, allow Indian investment in fertilizer plants, re-initiate negotiations for OVL’s bid for oil blocks, clear pending dues of Indian companies and facilitate bilateral investments

The Indian Minister of Petroleum and Natural Gas, Dr M Veerappa Moily who had recently been to Baghdad and Ashgabat concluded several deals for petroleum and chemical fertilizers with Iraq and paved the way for the visit of the Iraqi Prime Minister Nouri al-Maliki to India expected later this year.

About 14 agreements, including those on energy, fertilizers, agriculture, water resources, trade, cultural and educational exchanges, youth and sports, healthcare and medicine, science and technology, industry, mutual legal assistance and cooperation diplomatic agencies and institutions are likely to be signed on al-Maliki’s visit.

On his return from entourage of two countries, Dr Moily said : “The 17th Steering Committee Meeting on TAPI Project decided to conclude the Transaction Advisory Services Agreement and the formation of the international company TAPI Limited in a time bound manner and committed to the timeline for completion of the project by 2017.”

The TAPI parties noted that the major objective of the Transaction Advisor Services was to search for a lead partner in the consortium (the consortium leader) and this ought to be explicitly reflected in the Transaction Advisory Services Agreement. The Parties stressed that a suitable Consortium Leader, outside the four countries, is necessary for implementation of the TAPI Project. A shortlist of companies will be provided by the Turkmen party to the buyers by October/November, 2013 for consideration under competitive solicitation as the potential Consortium Leader for TAPI Limited.

He said that Turkmenistan has agreed to part away with their exclusive rights over the control of upstream line. A boost to the TAPI Project came from signing of long overdue signing of Gas Sales and Purchase Agreement (GSPA) between Afghanistan and Turkmenistan, thereby completing the explicit commitment of all four countries involved in the project.

Dr Moily who was in Ashgabat on July 9 met the Turkmen President Gurbanguly Berdimuhamedov, prior to the steering committee meeting. The Turkmen President assured him of his country’s commitment to the TAPI project and also cooperation between India in Turkmenistan in downstream sector and process industry.

While in Baghdad on July 7-8, the Indian Petroleum and Natural Gas Minister met the the Iraqi Prime Minister Nourie al-Maliki, Deputy Prime Minister Dr Saleh al-Motlaq and a host of other dignitaries.

The 17th India-Iraq Joint Commission Meeting, Iraq agreed to immediately re-initiate negotiations with ONGC Videsh Ltd (OVL), an Indian public sector company, for finalizing contract for oil block-8, which was pending since ratification in 2001.

Also Iraq offered three discovered oil blocks in the Middle Furat oil fields on nomination basis. It agreed to consider investment in the upcoming 15 MMTPA oil refinery of Indian Oil Corporation Limited (IOCL) at Paradip in Odisha.

The Iraqi side also expressed interest in the proposal of IOCL for participation in a refinery project in Iraq. Iraq committed to meeting the long term requirement of crude oil of India and was also open to consider more favorable commercial terms including extending the interest free credit period from 30 to 60 days.

Possibilities for cooperation in the gas sector that could, inter-alia, include import of LNG from Iraq, Indian participation in exploration as well as value addition through petrochemical projects and liquefaction terminals in Iraq were discussed.

Moily highlighted the keenness of Indian companies for participation in the Nassiriya integrated project which was welcomed by the Iraqi side. It was agreed that the companies would urgently mount delegations to initiate discussions on the various areas of agreement. It was also agreed that a formal MoU on cooperation in the energy sector would be signed between the two sides during the forthcoming visit of the Iraqi Prime Minister to India later this year.

The Indian side expressed keen interest on investment in existing and new ammonia-urea plants. After detailed deliberations it was agreed to have a Letter of Intent (LoI) and confidentiality agreement to establish an urea plant and phosphate fertilizer unit as joint sector projects in Al-Qaim/Al-Anbar area in Iraq which has all facilities like water, natural gas, railway connectivity to the port, availability of phosphate, which are crucial requirements for the success of the fertilizer projects. Natural gas will be tied up for the plant by the Iraqi Government. It was also decided that a technical committee may be deputed to Iraq to have detailed discussions further to enable both the Governments to finalize the agreement.

Considering the abundant availability of sulphur in Iraq, India expressed its intention for immediate import of sulphur from Iraq. Both sides agreed to take immediate steps to work out the details.

The issue regarding pending dues of Indian Companies of $2.29 billion was discussed in detail and it was agreed that Iraq would examine the same and revert before the visit of their Prime Minister to India. Both sides also agreed to expand the trade basket and make it more diversified.