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India, Yemen cement energy partnership

Atul Aneja

India seeks assured supply of Masila crude, offers help in evaluation of bids

Murli Deora

DUBAI: India and Yemen have cemented their energy partnership by signing a protocol, which would allow Indian investments in all aspects of Yemen's oil and gas industry.

The protocol on bilateral cooperation in the oil and gas sector was signed on Saturday in Saana, in the presence of the Minister of Petroleum and Natural Gas, Murli Deora, and his Yemeni counterpart, Khalid Mahfoud Bahah.

Earlier Mr. Deora called on Yemen's President, Ali Abdullah Saleh.

Official sources told The Hindu that the protocol covered various investment opportunities including downstream activities such as refining, pipelines and oil storage facilities.

The Indian side proposed signing an assured long-term oil supply contract of one million tonnes with Yemen. The sources said that the Masila light crude was especially suitable for processing in some refineries in India.

Yemen has assured India that Indian companies will be allowed to carry out oil exploration on a wider scale. Already Reliance Industries has won the bid for two oil exploration blocks.

A consortium of Oil India Ltd., Indian Oil Corporation and Gujarat State Petroleum Corporation (GSPC) has secured bids for three blocks. While these deals have been finalised, they are expected to be formally signed in March, the Yemeni side said. The talks covered an Indian offer of sending experts to survey vast tracts of land in Yemen, which could be potentially oil bearing. India's participation in streamlining Yemen's bidding and evaluation procedures on exploration was also discussed. The Indian delegation offered development of a special software, which would be tailor-made to suit Yemen's requirements for this purpose.

Joint ventures

Both sides also discussed setting up joint ventures for revamping some of Yemen's under-performing refineries. The sources said that the Yemeni side showed an active interest in this proposal.

During a visit to India in January, the Yemeni oil minister had announced that Reliance Industries would set up a joint venture refinery with Yemen's Hood Oil Company. The refinery would have a 50,000 barrels per-day capacity and would be built in 36 months.

Yemeni delegation

A delegation from Yemen would be visiting India soon to study ways to establish a Compressed Natural Gas (CNG) distribution network, which could be replicated in its cities.

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