Riyadh: India wants to strengthen energy ties with top Opec (Organization of the Petroleum Exporting Countries) exporter Saudi Arabia, the country’s biggest supplier of oil, Prime Minister Manmohan Singh said on Sunday.
“We believe that conditions are ripe for moving beyond a traditional buyer-seller relationship to a comprehensive energy partnership,” Singh said in a prepared speech during a rare visit to the kingdom.
“Indian companies are well-equipped to participate in upstream and downstream oil and gas sector projects in Saudi Arabia,” he told Saudi business leaders.
Singh, who earlier met Saudi oil minister Ali al-Naimi, proposed to establish new partnerships between the two countries in the area of renewable energy through sharing of clean technologies and joint collaborations.
He gave no details.
Singh is the first Indian prime minister to visit the Gulf Arab kingdom since Indira Gandhi in 1982.
Saudi Arabia is willing to increase crude supplies to India to 40 million tonnes (mt) from about 25.5 mt currently to meet the rising energy demand of the south Asian country, the Indian government said in a statement after Indian oil minister Murli Deora met his Saudi counterpart Ali al-Naimi in Riyadh.
India will add one million barrels per day (bpd) to its refining capacity within two years, which would increase Saudi crude exports by 500,000 bpd over the next two years, said Ashok Sinha, chairman and managing director of Bharat Petroleum Corp. Ltd, told Saudi business leaders.
India’s current refining capacity is 3.5 million bpd, Sinha added.
Saudi Arabia is India’s largest supplier of crude and also a major source of remittances from Indian workers forming the backbone of seven million expatriates in the kingdom.
Indian investment in Saudi Arabia stands at more than $2 billion (Rs9,240 core), covering 500 joint ventures, and India wants Saudi Arabia to invest in agriculture, energy, construction, manufacturing and pharmaceuticals, Singh said.
Singh said bilateral trade reached almost $25 billion in 2008-09.
“The traditional relationship between Saudi Arabia and India is among the most strategic bilateral bonds for either country,” Riyadh-based lender Banque Saudi Fransi said in a report.
“India’s geographic dependence on the Gulf is likely to become amplified in the coming years due to limited prospects for enhancing domestic energy production,” it said.
Singh reiterated India’s economy should grow in excess of 7% in 2009-10 and return to a 9% annual growth rate in two years. “We expect to get back to the growth level of about 9% per annum within two years.”
India’s economy grew by 6% percent in the fourth quarter through December from a year earlier, the government said on Friday.
India’s economy grew 6.7% percent in 2008-09, slower than 9% or more in the previous three years.