India-Saudi to enhance ties in oil sector

New Delhi, Jan 17 (UNI) India and Saudi Arabia today said the two countries will enhance ties in the oil and gas sector even as the world's leading petroleum producer and exporter assured of a smooth flow of oil supply from its refineries into the country.

''We are a major supplier of oil to India and shall continue to be so. There is no reason for India to fear shortage of supply,'' Saudi Arabia Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi told reporters after a meeting with his Indian counterpart Murli Deora here.

He said the countries are also looking for mutual investment opportunities.

Pointing out that Saudi Arabia's spare crude oil capacity will be three million barrels per day on February one, the minister said the investments in the oil sector are usually for a long term and are not decided on short-term price movements.

''Oil producers are not moved by a price movement today tomorrow or in the next month. As producers we look at the future. Demamnd is going to grow for energy. Fossil fuels are the primary source of energy,'' Mr Al-Naimi said.

Natural disasters like tsunami, interest rates, value of dollar, statments of ministers also impact the market unfortunately, the oil minister of world's largest oil exporter said.

Mr Al-Naimi said Saudi Arabia will hold a forum for Asian countries in May. The forum will act as a platform to hold talks between the producers and consumers of the countries.

Saudi Arabia exports 90 per cent of its oil and generates 75 per cent of its government revenues from this fuel.

At the meeting between the two Ministers, they discussed investment opportunities for oil companies of the two countries in either Saudi Arabia or India.

It was underlined that in view of growing activities in the hydrocarbon, sector, the oil companies of two countries would immensely benefit from criss-cross investment in areas of hydrocarbon sector.

The Two Ministers reiterated the strategic partnership evolved during the visit of the King of Saudi Arabia in January 2006.

Referring to the opportunities in Saudi Arabia, Mr Al-Naimi informed that a big opportunity exist for engineering and service projects in Saudi Arabia in addition to those in exploration and production, refining and other downstream projects.

Indian side mentioned that there are three new grass root refinery projects under implementation by PSU oil companies at Bhatinda (HPCL), Bina (BPCL) and at Paradip (IOC), which companies from Saudi Arabia could consider for participation. Saudi Arabia also re-iterated full supply of crude oil to meet Indian requirements.

The two Ministers also referred to long standing friendly relations between India and Saudi Arabia. Mr Al-Naimi complimented India for supporting development of Saudi Arabia and informed that there are about 1.7 million Indians presently working in their country who have been making significant contribution to the development and growth of Saudi Arabia.

Later speaking to media Mr Al-Naimi said the international crude oil prices should be left to market for stability. He pointed out that stable oil prices are required for investment in E&P sector for the benefit of both producers and buyers. The visiting Minister expressed hope that producers and consumers will continue dialogue through various fora including International Energy Forum (IEF) and the regional dialogue opportunities one of which would be soon hosted by Saudi Arabia.

UNI