Iraq is likely to increase oil supply to India by around 30 percent as shipments from regional rival Iran drop following sanctions from the US and European countries, a senior Iraqi minister has said.
"India has requested 80,000 barrels per day of additional crude oil supply. We will increase the supply depending on the availability," Iraq's Minister of Water Resources Mohanad Salman Alwan Al-Shaibani told IANS in an interview.
Iraq recently became the second largest crude supplier to India, replacing Iran. Iraq supplies around 300,000 barrels per day (bpd), nearly 11-12 percent of the country's total demand.
India has been seeking increased supply of crude from countries like Iraq and Saudi Arabia, as imports from Iran are becoming difficult due to Western sanctions.
India has also requested Saudi Arabia, the largest supplier of crude accounting for almost one-fifth of the country's needs, to increase the supply by 100,000 barrels per day.
Al-Shaibani said Iraq targets to raise oil production to 2.9 million barrels per day by the end of this year from 2.6 million barrels per day recorded in April.
"With the increase in our overall production, we will increase supply to India," Al-Shaibani said.
Iraq, which holds the world's fifth-largest proven crude oil reserves, overtook Iran last year to become the top producer, after Saudi Arabia, in the Organization of Petroleum Exporting Countries (OPEC).
The minister claimed that there were huge demands for Iraqi oil and the country targets to enhance production sharply in the coming years that would help finance its development activities.
"India is one of our biggest trading partners. We share excellent relations with India and are keen to enhance trade and investment further," he said.
Al-Shaibani said Iraq welcomed Indian investments in oil exploration, refinery as well as in other sectors.
Major public and private Indian companies are expanding their business in Iraq. Iraq's Ambassador to India Ahmad Tahsin Berwari said Reliance Industries Limited (RIL), along with six other global firms, were recently shortlisted for development of the multi-billion-dollar Nasiriya oilfield project.
Jindal SAW Ltd. has won a $198 million contract to build and operate a factory for manufacturing oil and gas pipeline in Southern Iraq.
"A lot of other Indian companies are showing interests. They are comfortable doing business in Iraq," said Al-Shaibani.
When asked about the security concerns, the minister said in central and southern Iraq the situation has improved substantially and the government is trying to improve the situation in other parts of the country as well.