The cooperation between India and the UAE in the energy sector is expected to grow following the three-day visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to India on Wednesday.
The visit comes six months after Indian Prime Minister Narendra Modi came to the UAE to strengthen bilateral ties and increase investments between the two countries. A number of new agreements are likely to be signed, including in oil and gas and renewable energy, as part of the Abu Dhabi Crown Prince’s visit.
Robin Mills, Chief Executive Officer of Dubai-based Qamar Energy, said, "India is a growing energy market particularly with the Chinese demand slowing. So far we haven’t seen very much action by the Indian energy companies in the UAE, so it might be interesting to see if Indian energy companies are going to play more of a role here."
He said that no Indian company has yet participated in Abu Dhabi Company for Onshore Petroleum Operations (Adco) concessions but that might change. "Certainly that would be an interesting opportunity. Abu Dhabi wants to tie up with some key customers and Indian companies want to expand their operations and play more role in the Middle East," he said.
Abu Dhabi has so far selected Japanese company Inpex, Korean firm GS Energy, and French oil giant Total for the concessions. Other companies are yet to be finalised.
The concessions, which last for 40 years, cover the 15 principal onshore oilfields of Abu Dhabi and represents more than half of the Emirate’s production.
When asked whether any of the UAE energy companies would be keen to invest in India, Mills said there is a lot of room for investment in the Indian energy sector, particularly in power generation.
Following the visit of the Indian Prime Minister in August, the two countries decided to promote a strategic partnership in the energy sector, including through UAE’s participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors, and collaboration in third countries.
The paper also quoted Gary Dugan, Chief Investment Officer at Emirates NBD, as saying, "A Memorandum of Understanding already exists between Abu Dhabi National Oil Company (Adnoc) and the Indian Strategic Petroleum Reserve. India is seen as an important customer for UAE oil and the cooperation could stretch to UAE investment in developing energy reserves of gas and oil in India."
He said the drop in the oil price will not have much impact on the commitment of the UAE to invest in India. "India is too large an opportunity for the current weakness of the oil price to prevent a significant commitment from the UAE towards helping India develop."
A number of UAE companies have invested in India, including in the energy sector. Abu Dhabi National Energy Company has a presence in India operating 250MW lignite-fired power plant in Neyveli in the southern Indian state of Tamil Nadu. Another power plant of the company in the northern state of Himachal Pradesh commenced operations last year.
India imports about 270,000 of crude oil per day, with the UAE being its sixth-largest supplier.