KOLKATA (miningweekly.com) – Ahead of the India–Africa Forum Summit to be held in Delhi later this month, the Indian government has directed national oil companies to start implementing a roadmap for increased investments in oil and gas assets on the African continent.
Oil diplomacy, aimed at gaining greater access to oil and gas assets in Africa, was expected to be high on the agenda of the summit, which would be held from October 26 to 29, and would be attended by political leaders from 40 African nations.
The summit was expected to generate effective engagements for India to secure its energy security through more investment in the African oil and gas sector, a senior official engaged in organising the event has said.
India currently sourced about 16% of its $125-billion worth of oil imports from African nations and the government was keen to step up its oil diplomacy and increase the share to between 20% and 25% in the short term, the official pointed out.
Taking its cue from this, overseas investment arm of national oil and gas exploration and production major ONGC Limited, ONGC Videsh Limited (OVL), has been quick off the block to bid for at least six to seven blocks in Uganda.
OVL was conducting studies on geological data from several oil and gas blocks in Uganda and bids would be submitted early next year, the official added.
He said the summit would be an important platform for India to establish deeper engagements with its largest energy suppliers in Africa, including Nigeria, Algeria, Angola, Mozambique and Egypt.
One of the subjects of engagements of the oil diplomacy would be to explore opportunities for India to access larger energy imports through long-term contracts rather than the current predominant spot contracts.
For example, in the case of Nigeria, diplomatic facilitations would broach larger investments by Indian Oil Corporation (IOC), the country’s largest oil refiner-marketer, in upgrading and modernising Nigerian oil refineries in lieu of long-term contracts for energy imports from the African nation.
In Mozambique, Oil India Limited, Bharat Petroleum Corporation Limited and ONGC had already committed investments to the tune of $7-billion in developing oil and gas assets and the target was to double this investment over the next five years.
Officials said sovereign dialogues like those to be held during the summit would substantially improve the ease of doing business, which could, as was the case in Mozambique, speed up the process of granting exploration and production contracts that enabled production-sharing between the two countries.