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Monday, 8 July, 2002, 11:23 GMT 12:23 UK
Iraq and India ties warmed by oil deals
Indian Minister of Oil and Gas Ram Naik (left) and Iraqi Oil Minister Amir Mohammed Rasheed
Mr Naik (left) and Mr Rasheed boosted trade ties
Iraq and India have signed an agreement to boost trade ties, especially in the oil sector.

Indian Oil Minister Ram Naik told a press conference that the Indian oil firm Oil Natural Gas Corporation Limited (ONGC) would soon open offices in Baghdad.


This will give a boost to the economic relations of the two countries

Amir Muhammed Rasheed
Iraqi Oil Minister
Mr Naik added, after meeting his Iraqi counterpart Amir Muhammed Rasheed, that "work was progressing" on an ONGC oil concession in southern Iraq.

Iraq has awarded Indian companies a number of contracts under the United Nations "oil-for-food" programme, in return for India's diplomatic support.

The programme allows Iraq to bypass sanctions imposed for its 1990 invasion of Kuwait and use oil revenues to buy food and humanitarian goods.

The US has classified Iraq as a member of the "axis of evil" while it has strengthened relations with India to prosecute the war in Afghanistan.

'Strategic partner'

After meeting with Iraqi President Saddam Hussein on Saturday, Mr Naik said that India opposed the sanctions on Iraq, and called for them to be ended immediately.

Unloading food in Iraq
India is a major supplier to Iraq under the "oil for food" programme

Mr Rasheed described India as a "strategic partner".

"We have entered new projects in railways, oil and gas, health and industry in addition to technical co-operation and this will give a boost to the economic relations of the two countries, which in consequence will be reflected on the volume of trade exchange," Mr Rasheed said.

Under the agreement, India is to supply Iraq with medicine, wheat, rice, railway equipment and turbines for electricity generations.

Mr Rasheed said trade between Baghdad and New Delhi under an "oil-for-food" deal with the UN had reached $1.1bn.

Expanding oil interests

Iraq, India and Algeria are "in the final stage" of a deal to start exploring and drilling the Tuba oil field between Zubair and Rumaila in the south of the country.

"It is a consortium between Indian companies and the Algerian Sonatrach company, and we hope to realise it by the end of summer," Mr Rasheed was quoted as saying in the ruling Baath party's Al-Thawra newspaper.

The field was being developed by Iraq until the 1991 Gulf War, when storage facilities were destroyed.

ONGC is awaiting approval from its board to invest approximately $63m in Iraq.

India, which imports more than two-thirds of its crude oil requirement, has been seeking foreign sources as domestic output matures.

Last month it took over a concession in Sudan from Canadian oil company Talisman.

See also:

18 Jun 02 | Business
05 May 02 | Middle East
09 Jan 02 | Middle East
12 Dec 01 | Business
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