Home | News    Monday 19 April 2004

Oil spurs Brand India’s African safari


By SANJAY DUTTA, the Times of India

NEW DELHI, April 19, 2004 — ONGC’s nearly $1 billion investment in Sudan’s oilfields has led to a revival for Made-in-India products, ranging from automobiles to oil technology.

Its overseas investment arm, ONGC Videsh (OVL), spent about $969 million to acquire stakes in the Greater Nile oilfield and two exploration blocks in the country.

This is the second biggest Indian investment overseas, after the $1.8 billion pumped into Russia’s Sakhalin gas fields.

The spin-off has proven more profitable than a few million tonnes of equity crude. Indian managers and workers at Greater Nile have not only won corporate battles against their Chinese and Malaysian partners, but have also put Indian goods back into focus of the locals.

While Indian automobiles topped Sudan’s shopping list sometime back, now it’s oil technology and equipment.

The latest example is a Rs 1,000-crore ($200-million) contract to domestic pipemaker PSL Ltd for a 785-km oil pipeline.

The job involves building a link from the Mellut Basin Oil Development Project - in which OVL has 16 per cent stake - to Khartoum, and is being awarded in the face of competition from global players.

Last year, the Sudanese government gave OVL the job of laying a 741-km pipeline to Port au Sudan and modernise the Khartoum refinery at a cost of nearly $600 million. An Indian firm, Mumbai-based Dodsal group, is set to bag the $175-million pipeline contract.

There are several other Indian firms in telecom, railways and power, making efforts to register a presence. These include TCIL, ITI, Rites, Konkan Railways, Ircon, Kirloskars and L&T.

But the biggest beneficiary of Indian oil investments has been the automotive sector. There is talk of Maruti reviving its agency there. Mahindra & Mahindra and Eicher are trying to enter Sudan.

President Abdul Kalam’s visit to Khartoum last October gave an impetus to bilateral trade.

The two countries signed the crucial Bilateral Investment Promotion & Protection Agreement, Double Taxation Avoidance Agreement and an MoU on co-operation in IT. India also announced a $50-m line of credit to Sudan.

This change has come about in past three years, in tandem with peace process in Sudan.

Bilateral trade grew 100 per cent, with exports to Sudan rising to Rs 580 cr in 2001-02 from Rs 234.10 cr in 1998-99. The EU has pledged to release $400 m as help for rebuilding Sudan after the peace pact

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