By IANS
New Delhi : India is prepared to participate in Africa’s infrastructure development, much like China, in return for greater access to its hydrocarbon reserves.
This was indicated by Petroleum Secretary M.S. Srinivasan Wednesday evening at a function to announce the ‘India-Africa Hydrocarbon conference and exhibition’ next week — which could be termed India’s formal coming out party in the market of African hydrocarbon riches.
India has been in the African hydrocarbon industry since the 1990s and has significant assets in some key oil-producing countries like Nigeria and Sudan. Now, with rising oil prices and volatility in the Middle East, it has been eyeing Africa more seriously to meet its soaring energy demands and diversify its energy procurement basket.
ONGC Videsh, the foreign investment arm of the state run ONGC, has so far invested $2 billion in eight countries in Africa. The Indian Oil-Oil India consortium has put in another $125 million in Libya, Nigeria and Gabon.
“For the twelfth plan, OVL (ONGC Videsh Ltd) alone has set a target of over $12 billion for investment abroad. I am sure that a significant part of that will go to Africa,” Srinivasan said.
Currently, Africa meets 16 percent of India’s annual hydrocarbon imports of 110 million metric tonnes, and the petroleum secretary is talking about increasing it to 20-21 percent.
India has, however, had a disadvantage of being a late entrant to the African energy market, with China having moved faster to secure supplies. China currently sources 18 percent of its hydrocarbon imports from Africa, which amounts to about 37 million metric tonnes.
A particularly successful Chinese strategy has been to woo African governments with large infrastructure development packages for lucrative energy contracts.
Srinivasan noted that India also has been trying to emulate that policy, by combining lines of credit as an incentive. Besides, he pointed out that India already had a model in the $6 billion investment by ONGC and Mittal Steel in Nigeria for setting up a refinery, a power plant and railway lines. That was in return for a contract of 600,000 barrels for a period of 25 years.
He indicated that sometimes such contracts in development projects may not just go to public sector companies, but could be granted to relevant Indian companies, even in the private sector.
The conference, which will take place Nov 6-7, will be attended by at least 12 African energy ministers, besides more than 100 delegates from 25 countries. It is being jointly organised by the Ministry of Petroleum and Natural Gas, industry lobby Ficci and Unctad.