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India, Arabia develop energy pact

India and Saudi Arabia have agreed to develop a strategic energy partnership.

india Updated: Jan 28, 2006 17:06 IST

India and Saudi Arabia agreed on Friday to develop a strategic energy partnership that will boost ties between Asia's third-largest consumer and the world's top oil exporter.

The agreement seeks to increase the export of Saudi crude oil to India and promote joint investments by private and state-run firms in energy projects in both countries, a joint statement issued by the two governments said.

"Both countries will develop a strategic energy partnership based on complementarity and interdependence," said the joint statement at the end of a four-day visit to India by Saudi King Abdullah.

The two also aim to set up joint ventures for gas-based fertiliser plants in Saudi Arabia, it said.

The statement gave no details of investments.

"The elements of this partnership would include...Saudi investments in oil refining, marketing and storage in India, subject to commercial viability," the statement said.

King Abdullah said this was the first joint declaration ever signed by any Saudi monarch with any country.

Saudi Arabia accounts for a quarter of India's crude oil imports and has said in the past that it was keen to enter the refining and retailing sector in India.

India, which imports 70 per cent of the oil it consumes, has signed a series of preliminary agreements, hoping to get help from foreign partners to win access to oil and gas fields abroad.

First Published: Jan 27, 2006 19:16 IST