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India, Egypt focus on expanding energy ties

CAIRO: India and Egypt are focusing on ways to expand their energy ties as part of their efforts to rebuild their economic relationship.

In his discussions with Egyptian Prime Minister Ahmed Mahmoud Mohamed Nazif and senior Ministers, the visiting Minister of State for Commerce and Power Jairam Ramesh highlighted the need for greater Indian participation in the Egyptian energy sector.

He pointed to the need for assured energy supplies to ensure that some of the key mega projects, which were in the final stages of discussion, take off.

Egypt currently produces around 7,00,000 barrels of oil per day and has estimated gas reserves of around 66 Trillion Cubic Feet (TCF).

Mr. Ramesh said the ONGC (Videsh) — the overseas arm of the Oil and Natural Gas Corporation — had already made a promising start in its oil exploration venture in Egypt. The company and its Egyptian partner IPR Red Sea Incorporated drilled an exploration well in the Gulf of Suez with a promising flow of around 4,600 barrels a day.

The two were also drilling their second and third exploratory wells in the North Ramadan Concession in the same area. Besides, the ONGC (Videsh) was negotiating a 33 per cent stake in an offshore block operated by Shell in the northeast Mediterranean.

Analysts pointed out that a successful outcome of these ventures would ensure the presence of an Indian energy footprint in the Red Sea and Mediterranean.

The Gujarat State Petroleum Corporation (GSPC) and its Egyptian partners EGAS and GANOPE were also set to move into the Mediterranean Sea after they signed a deal in March to explore the North Hap’y offshore field. The joint venture would also have exploration rights in the South Diyuran onshore block located in Egypt’s Western Desert area.

Mr. Ramesh said India had ambitious plans to expand its energy partnership with Egypt in the downstream sector, provided adequate supplies of gas as feedstock were made available.

Apart from the public sector giant Indian Oil Corporation (IOC), top Indian private companies including Reliance Industries, Tata and Essar Global were interested in setting up refineries, LNG terminals and petrochemical complexes.

A Joint Working Group had been established between the IOC and the Egyptian General Petroleum Corporation. Preliminary discussions had begun on establishing an IOC refinery in Egypt.

In the private sector, Reliance Industries planned to invest around $4 billion in Egypt on a plastics park, which, Mr. Ramesh said, would emerge as the “largest single plastic processing hub in the world.” The investment proposal also included the establishment of a petrochemicals complex.

Uncertainty over gas supplies was hampering a final decision on the proposed $1billion investment by Tata Chemicals for the manufacture of ammonia and urea.

During his discussions, the Minister said the Bharat Heavy Electricals Limited had already completed the supply, installation and commissioning of the contracted electric transformers in Egypt. The company now intended to make substantial investments for the manufacture of boilers and transformers in Egypt.

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