Store Our Oil And Take Two-Thirds For Free: UAE's Offer to India

Discussion in 'Foreign Relations' started by Indx TechStyle, Feb 11, 2016.

  1. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Store Our Oil And Take Two-Thirds For Free: UAE's Offer to India
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    New Delhi: The United Arab Emirates' national oil company - Abu Dhabi National Oil Company (ADNOC) - has in the first deal of its kind agreed to store crude oil in India's maiden strategic storage and give two-third of the commodity to it for free.

    India, which is 79 per cent dependent on imports to meet its crude oil needs, is building underground storage facilities at Visakhapatnam in Andhra Pradesh, and Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil to guard against global price shocks and supply disruptions.

    Adnoc is keen on taking half of the 1.5 million tonnes Mangalore facility, Oil Minister Dharmendra Pradhan said on Wednesday.

    It will stock 0.75 million tonnes or 6 million barrels of oil in one compartment of Mangalore facility. Of this, 0.5 million tonnes will belong to India and it can use it in emergencies. Adnoc will use the facility as a warehouse for trading its oil.
    The 1.33 million tonnes Visakhapatnam storage and 2.5 million tonnes Padur stockpile together with the 1.5 million tonnes Mangalore storage will be enough to meet nation's oil requirement of about 10 days.

    After talks with visiting UAE Minister for Energy Suhail Mohammed Al Mazrouei, Mr Pradhan said the tax issue remains to be sorted out before Adnoc can begin storing oil at Mangalore.

    Congress-ruled Karnataka government has not yet agreed on waiving VAT (value-added tax) on the crude oil imported for the strategic storage, which UAE wants to use to stock oil when prices are low and supply to its customers when rates are good.

    "This will be beginning of our strategic ties," he said, adding that Prime Minister Narendra Modi's visit to UAE in August last year, the first by an Indian Prime Minister in 38 years, laid the foundation of closer cooperation.

    The UAE had then committed to invest $75 billion in India, and Mr Pradhan on Wednesday showcased to Mr Mazrouei opportunities for that investment.

    "We have offered them refinery projects, petrochemical plans, pipelines and LNG terminals for investment," he said.

    On offer was 26 per cent stake for $700 million in ONGC's about-to-be-commissioned petrochemical project at Dahej in Gujarat and 24 per cent equity for $200 million in expansion being planned by BPCL of its subsidiary Bina refinery in Madhya Pradesh from 6 million tons to 7.5 million tonnes.

    Also, an investment of $530-850 million can get the UAE 25-40 per cent stake in HPCL's planned petrochemical plant on the Andhra coast, he said, adding that the Gulf national can also invest in the planned 60 million tons in Maharashtra and the Jagdishpur-Haldia and Paradip-Surat gas pipelines.

    "UEA makes up for 8 per cent of our oil imports. We are trying to import more oil from UAE. In 2016-17, we plan to import 2.5 million tonnes more oil than current year's purchase of 16.11 million tonnes," he said.

    Mr Pradhan said areas of mutual interest were discussed during his meeting with UAE Energy Minister.

    Indian firms are not present in upstream oil exploration and production business in the UAE, he said, and mentioned the interest of companies like ONGC Videsh Ltd (OVL) to secure producing or prospective assets there.

    Also, they are interested in taking stake in Abu Dhabi Company for Onshore Petroleum Operations Ltd (ADCO), he said, adding that Engineers India Ltd (EIL) was interested in engineering and consultancy contracts in UAE.

    "We also offered them partnership in building of second phase of strategic crude oil storages," he said.

    India is looking at building four more strategic crude oil facilities at Bikaner in Rajasthan, Rajkot in Gujarat, Padur in Karnataka and Chandikhole in Jajpur district of Odisha.

    Besides Adnoc, Kuwait Petroleum Corp (KPC) has also evinced interest in hiring a part of the maiden strategic storage.
    @Sakal Gharelu Ustad @pmaitra @sob @LETHALFORCE @Virendra @Blackwater @bose @Gessler @sabari @Nuvneet Kundu @asingh10 @aditya g @Abhi9 @Sukhpal @Immanuel @roma @gslv markIII @HariPrasad-1 @Kshatriya87 @VIP @Ancient Indian @sorcerer @maomao @Srinivas_K @SREEKAR @DFI_COAS @Smiling Creed @FRYCRY @WolfPack86 @Bornubus @Tshering22 @Kunal Biswas @Yusuf @sayareakd @Rizvi Khan @indiatester @tejas warrior @Chinmoy @cobra commando @guru-dutt @Agnostic_Indian @DingDong @sasum @Screambowl @vijaytripoli @kafir kaur
    :peace::peace:
     
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  3. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    they want to store their oil when the prices are cheaper and sell when the price is good.

    Since we already have oil nearby the stored oil becomes good option. Good Business by UAE.
     
  4. pmaitra

    pmaitra Moderator Moderator

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  5. I_PLAY_BAD

    I_PLAY_BAD Regular Member

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    India must not act hastily. This is a good deal and India must be wary to address Iran's (an enemy of UAE) concerns as well. If needed India must land on a similar land mark deal to encourage our Iranian friends.
     
  6. sorcerer

    sorcerer Senior Member Senior Member

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    If the offer is good..take it...
    In statecraft there is no permanent friends or enemies only permanent interests.
    If IRAN is worried..let Iran make a better deal!! May be they would.
     
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  7. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    @sorcerer @I_PLAY_BAD
    I was reading a magazine over US strategy to remain greatest power and look, what I got a selected article:
    China was supported to nullify the effect of Soviets.
    Further China rose as a great power to balance US itself. So, India is being helped to neutralize China.
    And as with time, India becomes other power centre like US, Soviet or China, US must help Pakistan to balance up India.
    Pakistan has also not any hegemonic dreams like China and India. Their policy is also centred towards only India and will never try to US influence in rest of world
    .
    It's really concerning. What do you think bro @no smoking ? :confused1:
     
  8. genius

    genius Regular Member

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    India won't reach such heights. So we have nothing to worry about.
     
  9. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    A win win deal for both country. Small UAE will find it very difficult to build such a big store capacity. That shall not be very safe also. If the deal is struck, it will be a win win for both the countries.
     
  10. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Why? It will surely reach.
    We have massive population and fastly expanding economic, military and technical giant.
    Around 2050, India's per capita income will become around $35-40000(closer to today's Britain) and will become biggest or second biggest economy.
    Defense Budget will be same as that of US at that time, gap between India and pak will be like US vs Mexico. As watching current speed, military and space technological level is also awesome. Will have 60+ submarines, 10+ INS Varsha like bases, 15K+ Air Force, 6-7 Aircraft Carriers and a lot more, enough to wipe out even many large countries from the map.
    India is already just 4th after US, Russia and China. What would be condition by then. Think. :D
     

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