India keen on Sudan investment despite SSudan unrest

February 5, 2014
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Indian Foreign Minister Salman Khurshid (R) and his Sudanese counterpart Ali Ahmed Karti/AFP
Indian Foreign Minister Salman Khurshid (R) and his Sudanese counterpart Ali Ahmed Karti/AFP
KHARTOUM, Feb 5 – Damage to Indian-invested oil facilities in war-torn South Sudan will not deter New Delhi from future business opportunities in the region, its foreign minister said in Khartoum Tuesday.

State-owned ONGC Videsh Ltd, a partner in two joint oil production companies in South Sudan, announced on December 26 that the firms had temporarily halted operations there because of deteriorating security.

The firm has also invested in oil export pipelines in Sudan.

“I will certainly persuade them that they must raise the level of their ambitions and their determination to continue with business here,” External Affairs Minister Salman Khurshid told AFP in an interview on the first day of an official visit to Khartoum.

The oil company’s facilities in South Sudan suffered “a bit of damage… nothing irreparable,” an Indian official said.

“This is part of life,” Khurshid told AFP.

“I think ONGC are a determined lot of people, and they are very experienced, and the government supports them, so whatever be the problems that they have suffered I’m quite clear in my mind that they intend to move forward.”

Since mid-December soldiers loyal to the South’s President Salva Kiir have been battling rebel troops and militia who back Kiir’s sacked vice president Riek Machar.

India’s demand for crude is growing

India had about $2.3 billion invested in Sudan’s petroleum sector before South Sudan’s independence in July 2011.

The exact value north of the border after the South’s separation is difficult to determine.

South Sudan split with about 75 percent of united Sudan’s oil production but pipelines and the Red Sea export terminal remained in the north.

India is one of the world’s five biggest emerging economies and oil is its biggest import.

Its demand is expected to grow at 2.7 percent a year up to 2040 — well above the global rate of 1.7 percent.

Khurshid was to meet later Tuesday with executives of the oil firm, followed by talks Wednesday with Sudan’s Oil Minister Makawi Mohammed Awad.

Sudan has struggled with a shortage of foreign exchange reserves, a weakened currency and soaring prices since South Sudan became independent.

The lost crude accounted for most of Khartoum’s export earnings and half of its fiscal revenues.

India sees two-way trade with Sudan reaching $1 billion (741 million euros) by the end of the 2013-2014 financial year, Khurshid told reporters earlier after talks with his Sudanese counterpart, Ali Ahmed Karti.

Trade reached about $888 million in the financial year ended March 31, 2013.

India is the second-largest exporter to Sudan, after China.

“There’s a lot more that we can do together,” Khurshid said on the first-ever visit to Sudan by an Indian foreign minister.

The two sides discussed cooperation in manufacturing and agriculture.

Economists say revitalising Sudan’s neglected farm sector is a key to economic recovery.

Karti “reminded me that it is important that India should assist… with alternative energy, solar energy” to allow ground water to be pumped out for agriculture in areas where water is scarce, said Khurshid, on the final leg of a North African tour that included Morocco and Tunisia.

“We would certainly look at applications of sprinkler irrigation, applications of drip irrigation, that India has improved and perfected,” he said.

The two nations, both formerly ruled by Britain, have long-standing ties.

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