There is likely to be an increased cooperation in the energy sector after the visit of Indian Prime Minister Narendra Modi to the UAE this week.
In a joint statement, the two countries decided to promote a strategic partnership in the energy sector, including through UAE’s participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors, and collaboration in third countries.
India is a major importer of crude oil from the UAE. It imports about 270,000 of crude oil per day from the UAE with the country being the sixth largest supplier of the commodity to India.
Veerendra Chauhan, an oil analyst at the London-based Energy Aspects, told over phone that the cooperation between the two countries is set to increase after Modi’s visit. “India is putting a lot of emphasis on infrastructure and economic development. It needs secure supply of energy in the coming years and latest collaboration between India and the UAE will be important for the country.”
He said there will be investment opportunities for UAE based companies in the energy sector. “We will see increased cooperation between the two countries as the economy of India grows. The UAE will be an important partner.”
The UAE Minister of Economy Sultan Saeed Al Mansouri told this week that the UAE is open to meet any demand for oil from India. “The issue of energy is quite a challenge for India. It is a growing nation and the economy is growing 6 to 7 per cent and the demand for oil is there,” he told on a sideline of an investors meet attended by Modi.
According to Make in India website of the Indian government there are plenty of investment opportunities in the oil and gas sector especially in exploration and production, refining sector, pipeline transportation etc.
Gary Dugan, Chief Investment Officer at National Bank of Abu Dhabi said India is turning to alternative energy sources to supplement the ongoing development of more conventional sources of energy. “India has a chronic energy shortage that holds back its economic growth and development. It is likely to make available several large contracts for the development of its power industry in the future. In June for example the government announced tenders for 500 megawatts to 1,000 megawatt of solar power.” “It is understood that India needs to spend close to $100 billion to end blackouts.”
Demand for primary energy in India is to increase threefold by 2035 to 1.516 billion tons of oil equivalent from 563 million tons of oil equivalent in 2012. It is the fourth largest consumer of crude oil and petroleum products in the world.