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This was announced after the Indian Prime Minister Manmohan Singh and his Iraqi counterpart Nouri al-Maliki held talks on strategic bilateral, regional and international issues.
“We also agreed to further strengthen our counter- terrorism and intelligence cooperation…. Peace, security and stability in West Asia and North Africa are vital to both our countries,” Singh added.
Singh expressed hope that the “energy trading relationship should be turned into a strategic partnership”.
Maliki’s visit marks the first in decades by the head of state of Iraq to India.
India on Friday proposed a 10-year deal to meet increased crude oil demand, to which Iraq has given its assurance.
The energy cooperation deal signed by the two sides on Friday allows joint endeavor in the “areas of upstream and downstream oil and gas activities and related infrastructure”, more specifically in the conclusion of contract of Exploration Block-8 awarded to India’s ONGC Videsh Limited.
The Block 8 holds deposits of 645 million barrels of in-place reserves, of which 54 million are recoverable.
Iraq is now the second largest oil exporter to India, after Saudi Arabia.
Iraq has also offered three oil blocks in the underdeveloped Middle Furat Oil Field -Kifil, West Kifil, & Merjan- on nomination basis to Indian public sector oil companies.
Maliki said Iraq has also overqualified Indian companies such as ONGC Videsh Limited, MRPL and Reliance for participation in the Nasiriya Project Bid Round.India and Iraq are also exploring the possibility of making payments in domestic currencies through an understanding between the Central Banks of the two countries.
“We are exploring possibilities (of payment in local currencies — dinar and rupee) as we have substantial import … We will definitely be discussing this issue,” Indian Commerce and Industry Minister Anand Sharma said in New Delhi.
Meanwhile, Maliki urged Indian business leaders to invest in Iraq’s infrastructure sector, including railroads and ports, at a gathering organised by Indian industry bodies on Friday.
“We rely heavily on India for the reconstruction and development of Iraq which has been devastated by war and adventure. We are setting up democratic institutions which had been destroyed by dictatorship. Iraq had passed a number of legislations on investment promotion and management of the business sector,’’ he added.
India-Iraq bilateral trade currently stands at around $21 billion.