As PM Modi heads for Saudi Arabia, oil minister Dharmendra Pradhan set to seal Iran deal

NEW DELHI: Even as Prime Minister Narendra Modi gets ready to embark on his first visit to Saudi Arabia next week, India is making sure it plays the fine geopolitical balance in the region. On April 9-10 oil minister Dharmendra Pradhan will be in Iran to complete negotiations for a significant stake in the Farzad B gas field in Iran's South Pars.

Although the gas field had been offered to India some time back, the western energy sanctions against Iran made this difficult. With the sanctions now lifted, India is moving quickly to secure energy sources, and tie up additional elements of a strategic relatonship with Iran, even as Saudi Arabia cements its position as India's top petroleum source. Confirming his visit, Pradhan told TOI, "We are focusing on natural gas as the cleanest fossil fuel in India. We have been working consciously to secure India's energy access."

During his visit, Pradhan will also visit the UAE to seal the deal for the Gulf oil emirate to invest in and populate India's strategic oil reserve. India's reserve is slowly being built in Vishakhapatnam, Mangalore and Padur. The government wants it ultimately to be able to cover 90 days of oil supply. As a result of a new relationship between the two countries, UAE's Adnoc has agreed to store oil in Mangalore of which 2/3rds will be exclusively for Indian use while they can sell one-third.

Despite the move to cleaner renewable energy sources (India is committed to add 175 GW in renewable energy to its energy mix), for the foreseeable future, fossil fuels will continue to provide the base load energy. India's quest for energy access and energy security has driven the Modi government's foreign policy in four different directions — Gulf, Russia and Central Asia, South America and Africa.

Saudi Arabia will contiue to be India's largest source of petroleum, and though Riyadh would probably be happy to increase that proportion, India is likely to balance Saudi oil with other sources. Nigeria could pitch for top slot too, having moved up as one of the biggest sources for oil.

ONGC Videsh Ltd-led consortium will develop Iran's Farzad-B gas field and convert the gas produced into LNG. The consortium of OVL, Oil India Ltd (OIL) and Indian Oil Corp ( IOC) had discovered the 12.8 trillion cubic feet of gas reserves in the Farsi block in 2008, and named it Farzad-B.