India, Nigeria sign major oil deal

By Atul Aneja

ABUJA (Nigeria), MARCH 29. India and Nigeria today signed a major oil deal which could cement a strategic energy partnership between the two regional players.

``The agreement is central to achieving national energy security through diversified procurement,'' the External Affairs Minister, Mr. Jaswant Singh, said in a brief interaction with the press.

At the conclusion of the two-day meeting of the Indo-Nigerian Joint Commission, the Minister pointed out that Nigeria, according to the deal, would eventually supply oil to India at the rate of 120,000 barrels a day on a sustained annual basis. ``The importance of the agreement lies in obtaining the backing of the Nigerian Government for assured oil supplies to India.''

The Indian Oil Corporation and the Nigerian National Petroleum Corporation will work out the details of the agreement by June 30. ``The significance of the meeting lies in the fact that all agreements will be concluded in a time-bound framework'' Mr. Singh said. Pointing to the urgency which Nigeria attaches to the implementation of the economic agreements, the Nigerian President, Mr. Olusegan Obasanjo, on whom Mr. Singh called, said that ``the need of the moment is action.''

The hydrocarbon deal revolving around the annual supply of six million tonnes is seen by analysts here as an important ``building block'' in India's quest to achieve energy security.

With energy demands rising at the rate of three per cent with every one per cent growth of GDP, India is currently working out an elaborate energy procurement plan. According to Mr. Singh, ``We wish to acquire a strategic balance in the procurement policy of hydrocarbons.'

In the short run, Nigeria, the Persian Gulf and South-East Asia, especially Indonesia, are expected to be India's major energy suppliers. But Bangladesh, Qatar and Turkmenistan are also likely to emerge as India's future partners for the supply of energy, especially natural gas.

Apart from energy, India and Nigeria have decided to cooperate in the power sector. The Bharat Heavy Electricals Limited (BHEL) has already submitted a proposal for the construction of a 370-MW project apart from a 110-MW captive thermal unit, attached to a Nigerian steel mill. The Indian side has sought a decision by Nigeria on the project by June 30.

India and Nigeria, during the Joint Commission meeting, also discussed the rehabilitation of the Soviet-equipped Ajaokuta steel plant in detail. A proposal for the plant's revival has been submitted and Nigeria's decision for a contract is expected within two months.

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