Iraq offers to renegotiate oil block contract for OVL

Iraqi has agreed to immediately initiate negotiations with ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corporation Ltd, for finalising the contract for Oil Block 8, a matter which had been pending for almost a decade.

The decision was announced during the India-Iraq joint commission meeting held in Bhagdad last week. The JCM also made some other important decisions on India-Iraq cooperation in the energy sector.

The Indian delegation to the India-Iraq joint commission meeting led by petroleum minister M Veerappa Moily, later left for Ashgabat, Turkmenistan to participate in the 17th steering committee meeting of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project on Tuesday.

Iraqi oil minister who led the Iraqi delegation at the JCM offered  three discovered oil blocks in the Middle Furat Oil Fields to OVL on a nomination basis. 

Iraq also agreed to consider investment in the upcoming 15 MMTPA oil refinery of Indian Oil Corporation Limited (IOC) at Paradip. 

The Iraqi side also expressed interest in IOC's proposal for participation in a refinery project in Iraq.

Iraq has also committed to meet India's long-term requirement of crude oil and also consider more favorable commercial terms, including extending the interest-free credit period from 30 to 60 days.

The two countries also discussed the possibilities for cooperation in the gas sector that could, inter-alia, include import of LNG from Iraq, Indian participation in exploration as well as value addition through petrochemical projects and liquefaction terminals in Iraq. 

The Indian side also showed keenness for participation in the Nassiriya integrated project, which the Iraqi side welcomed.

Indian companies interested in the project would urgently mount delegations to initiate discussions on the various areas of agreement. 

Besides, India expressed keen interest on investment in existing and new ammonia-urea plants and for establishing a urea plant and phosphatic fertiliser unit as joint sector projects in Al-Qaim/Al-Anbar area in Iraq.

A technical committee will be deputed to Iraq for detailed discussions to finalise the agreement.

India would also be importing sulphur from Iraq where it is available in plenty. Both countries agreed to take immediate steps to work out the details.

The two countries discussed in detail the issue of the $2.29 pending dues of Indian companies and Iraq agreed to examine the same and revert before the visit of their prime minister to India.

Both sides also agreed to expand the trade basket and make it more diversified.

India and Iraq will sign a formal agreement on energy cooperation during the forthcoming visit of the Iraqi prime minister to India later this year.