India to seek long-term oil contracts from Arab countries

Dec 29, 2004 01:00 AM

India will seek long term crude oil supply contracts from Arab countries when they come to New Delhi to discuss stability, security and sustainability of oil supplies with their principal buyers.
The meeting of key oil producing countries -- Kuwait, Saudi Arabia, Iran, Qatar, Oman, UAE and Malaysia -- and four principal oil buyers in Asia -- India, China, Korea and Japan -- on January 6 would also seek to develop joint emergency response mechanism to tackle disruption in supplies in Asia.

"Oil producers currently enter into only one year supply contracts with consumers. We want the producers to commit to supplying specified volumes at per-determined price formula for 5-6 years," a top government official said.
New Delhi is bringing together oil producers and principal buyers in Asia face-to-face to sensitise each other with concerns of one another.
"We would also discuss mutual investment in oil and gas exploration and production, refining, pipelines and terminals in participating countries," the official said adding the idea was to create mutual dependency and evolve closer contact.

Also on agenda for the January 6 meet is development of an oil market.
"While the India, China, Korea and Japan consume most of the crude oil produced by the West Asian countries, there existed no benchmark for pricing of crude for them. The crude oil these countries buy is indexed to major markets in Europe and US. We want to develop our own trading market."
Besides, measures to tackle emergencies like disruptions in supplies or shortages would also be discussed.

Source: PTI
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