Abu Dhabi has awarded an Indian consortium a 10 per cent stake in one of its offshore oil concession areas, marking India’s first entry into the oil-rich Gulf emirate’s upstream hydrocarbons sector.
State-run Abu Dhabi National Oil Company late on Saturday signed the 40-year deal with the consortium led by ONGC Videsh, the overseas arm of India’s state-owned Oil and Natural Gas Corporation.
The consortium, which also includes the Indian Oil Corporation and a unit of Bharat Petroleum, paid a participation fee of 2.2 billion dirhams ($600m) for the 10 per cent stake in the Lower Zakum offshore concession. Other financial terms of the deal, which starts in March, were not released.
India’s Prime Minister Narendra Modi and Abu Dhabi’s Crown Prince Mohammed bin Zayed Al Nahyan witnessed the signing ceremony in the capital of the United Arab Emirates, highlighting closer ties between the Gulf emirate that supplies India with 8 per cent of its rapidly rising crude oil supplies.
“I am happy to note that we have progressed from a buyer-seller relationship to an era of mutual investments in the oil and gas sector,” said Mr Modi.
Indian energy consumption is forecast to more than double by 2040 as the Indian economy grows to five times larger than its current size and becomes the world’s most populous country.