NEW DELHI, 4 May 2005 — Saudi Arabia is likely to remain India’s main supplier of crude oil over the next two decades, during which the energy-hungry country’s oil imports are expected to double, Oil Minister Mani Shankar Aiyar said yesterday.
India imports 70 percent of its crude oil requirement, mostly sour grades from the Middle East, and its dependence on foreign supplies is set to rise in step with its rapidly growing economy.
“As India’s import of crude oil is likely to double over the next 20 years, imports from Saudi Arabia might also increase commensurately,” Aiyar told Parliament. “Saudi Arabia has assured supply of any additional requirement of crude oil to India.”
Saudi Arabia is India’s biggest supplier of crude oil, accounting for almost a quarter of India’s total imports of 1.9 million barrels per day, while Nigeria accounts for 15 percent.
India is taking steps to strengthen ties with crude oil suppliers, inviting them to invest in India’s state-run refineries in return for stakes in oil and gas projects in oil-rich countries. In January, Saudi Aramco said it wanted to enter India’s oil refining and retailing sector.
The company has already invested in refining companies in Japan, South Korea and the Philippines as it seeks stable outlets for its crude in the face of competition from other Middle East producers such as Iran and Oman. Aiyar said India would continue to encourage state-run Oil and Natural Gas Corp. to invest in overseas oil and gas projects to secure energy supplies for the country.
The company competes with Chinese firms for stakes in oil and gas projects and has invested in 12 countries including Russia, Sudan, Vietnam and Myanmar. Its overseas output rose 31 percent to 5 million tons in the year to March 2005.
Aiyar said ONGC was scouting for opportunities in several countries including Venezuela, Yemen, Kazakhstan, Kuwait, Nigeria, Angola and Ecuador.