India Offers 1 Billion dollar Sweetener For West Africa Oil Deals.
India is offering credit of up to 1 billion US dollar (6,2 milliarder DKR) to build power projects, railways, refineries and even stadiums in oil-rich but poor West African nations, as it seeks to quench its growing thirst for foreign oil, reports the World Bank press review Friday.
India, which imports 70 percent of its crude, has devised a multi-pronged strategy to ensure future oil supplies from overseas oil and gas properties. While political weight has been key, India is now also offering financial and industrial assistance. Talmiz Ahmad, a senior India oil ministry official, said that “West Africa is a long-term investment destination for India.”
Ahmad said India will offer commercial partnerships and joint ventures to a group of African countries in oil, roads, railways, IT, power and ports under the partnership development initiative. – This model is definitely worth pursuing, he said, noting the Africans now seem to realize the spoils of their oil should go into infrastructure instead of the pockets of oil majors.
A recent 6 billion US dollar infrastructure deal agreed in Nigeria by ONGC Mittal Energy, a joint venture between India’s state-run ONGC and Mittal, the worlds largest steel firm, is seen as one of the first examples of India’s new approach in West Africa.
ONGC has already carried out similar infrastructure deals in Sudan, where it built a 259 million dollar pipeline in exchange for exploration rights in the Greater Nile oil region. – This project (the Sudan deal) is probably the best example of what ONGC can do if it is given an opportunity in any country, said ONGC Chairman and Managing Director, Subir Raha.
India will now look to a group of eight West African countries in a special cooperation model called the Team-9 initiative, under which India offers credit for projects set up by Indian companies through the Export Import Bank of India. Team-9 countries include Burkina Faso, Chad, Ivory Coast, Equatorial Guinea, Ghana, Guinea-Bissau, Mali and Senegal. Ahmad said Sao Tome, Niger, DR Congo and Congo Brazzaville would also be approached by India.
Financial assistance for infrastructure is an important aspect of any oil deal with developing African countries, Raha said. Financial assistance is not new in the oil industry, but Indias willingness to offer such help to countries that struggle to secure credit privately is a positive step, said Praveen Martis, an analyst with British consulting firm Wood Mackenzie.
– These kinds of assistance are no doubt helpful. The Chinese have been doing it in countries like Sudan and Kazakhstan, where they have a substantial oil equity investment in the region, for quite a while now, Martis said.
– There is a risk factor in this, but it could be worth it if it helps Indian oil companies in strengthening relationships with the host countries and, in turn, offering a better chance in securing assets in these countries, he added.
Kilde: www.worldbank.org
