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India, Qatar deepen energy ties, seek to promote investments
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Gyanendra Kumar Keshri | 14 Apr, 2012
With growing demands for oil and gas and uncertainty looming over
supplies from sanctions-hit Iran, India has sought to deepen energy ties
with Qatar. The main focus of Qatari Emir Sheikh Hamad bin Khalifa al
Thani's three-day visit to New Delhi early this week was deepening
cooperation in the energy sector.
Apart from normal trade, the two countries agreed to promote investments in both upstream and downstream oil and gas projects.
This
is crucially important from India's energy security point of view.
Qatar, a tiny country located in the northeastern coast of Arabian
Peninsula with a population of just 1.7 million, has the world's
third-largest natural gas reserves after Russia and Iran. Qatar also has
the sixth-largest oil reserves in the Middle East and one of the
highest per capita incomes.
Qatar is going to host the 2022 FIFA World Cup and has bid to host the 2020 Olympic Games.
With
an annual production capacity of 77 million tonnes a year, Qatar has
now become the biggest exporter of liquified natural gas (LNG). The Gulf
state has developed its downstream and upstream oil and gas projects
mostly with the help of North American and European firms like Royal
Dutch Shell, ExxonMobil and French energy firm Total.
Despite
cordial political relations, geographical proximity and a large Indian
diaspora presence, Indian business involvement in Qatar is negligible.
Indians are the largest expatriate community in Qatar. Of the total 1.7 million population, over 500,000 are Indians.
"As
of now it seems there is relatively low interest among the corporate
houses and high net worth individuals of either country for
opportunities in the other country," said Kurian Kuriakose, managing
partner of Doha-based Morison Menon Chartered Accountants.
Kuriakose said the main reason behind low business engagement is the lack of information, which results in missed opportunities.
With
annual imports of 7.5 million tonnes, India is one of the biggest
buyers of Qatari gas. India also imported 5.6 million tonnes of crude
oil from Qatar in 2010-11 and has been asking the Gulf country to
increase gas supply by at least 3 million tonnes a year.
No decision on additional gas supply was taken during the Qatari ruler's visit because of continued differences on price.
However, during the visit Qatari authorities were also focused on exploring investment opportunities in India.
Hussain
Ali al Abdulla, executive director of Qatar Investment Authority, the
Gulf country's sovereign wealth fund, said the authority would target to
invest at least $10 billion a year in India.
The Qatar
Investment Authority, one of the richest sovereign wealth funds that
invested almost $30 billion globally last year, has an insignificant
presence in India. The authority's investment in India is around $500
million, mostly in stocks.
Abdulla said despite the prospects of
high returns, the Qatar Investment Authority has not made any
significant investments in India due to lack of understanding of the
business. "I don't understand the business environment very well here,"
said Abdulla, who was a part of the high-level delegation that
accompanied Sheikh Hamad on his third state visit to India from April
8-10.
During the visit, India and Qatar also agreed to increase
cooperation in the areas of education, legal affairs, banking, cultural
and tourism. The two countries signed six pacts to enhance cooperation
in these fields.
The Qatari ruler's visit followed Prime Minister
Manmohan Singh's visit to Doha in November 2008. Singh is the only
Indian prime minister to have visited Qatar.
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